When bankers, economists and other financial professionals gathered late last week for the annual Jackson Hole Economic Policy Symposium, the focus was on payments this year.

Specifically “Financial Innovation — Implications for Payments and Policy” was the theme, and a new payments play took center stage: “tokenized deposits.” That reference to digital assets that banks can transfer through a financial institution network is fast catching on as a safer and more cost-efficient alternative to stablecoins.

One speaker in particular at the event, Bank for International Settlements General Manager Pablo Hernandez de Cos, underscored the point in a speech on Friday at the conference.

“Unlike stablecoins, tokenised deposits operate within the two-tier system. They preserve the tight link between deposit‑taking and credit provision,” Hernandez de Cos said, according to the text of his speech. “This ensures that funds remain within the banking system, reducing the risk of disintermediation and supporting resilience.”

Stablecoins have been gaining ground in recent years as the most trustworthy type of cryptocurrency because, unlike cryptos like bitcoin or ethereum, stablecoins theoretically are tied to a more stable asset, such as the U.S. dollar. The Genius Act, signed last year by President Donald Trump, gave credence to that notion by creating a regulatory framework for stablecoins and their use.

Still, Hernandez de Cos emphasized the interoperability advantage of tokenized deposits over stablecoins because financial institutions can more easily pass the former over a shared network.

“Even the ‘same’ stablecoin on different chains is not interoperable without risky or costly workarounds,” Hernandez de Cos said. “Tokenised deposits, by comparison, typically circulate on permissioned platforms.”

A key aim for bankers and other financial services providers is to develop currencies and tools that allow them to transfer money and assets more easily across borders. International money transfers have been slow, inefficient and expensive for decades.

The U.S. real-time payments systems are now trying to bridge the gap by extending their instant payments across borders. The Clearing House bank owners are preparing to extend the RTP Network in that way in the first half of next year while the Federal Reserve has proposed the same for its FedNow system at some point. The Bank of International Settlements has also experimented on that front with the cross-border Project Agora payments project.

Tokenized deposits could play into those new international payments strategies. In June, a group of banks working through The Clearing House said they would create a new tokenized deposit network that would link “on-chain activity with traditional payment rails and enable clearing and settlement of tokenized commercial bank money at scale.”

“We're looking forward to advance a lot of the traditional payment rails that exist today to be more fully operational, 24/7, expanding the capabilities of the instant networks while in parallel really double-clicking and focusing on building a tokenized strategy for accounts, deposits, [and] the interoperability” of all that, Carl Slabicki, BNY’s head of commercial global payments, said in an interview last month.

Hernandez de Cos drew a comparison between the digital assets of today and commodities traded in the frontier days in Wyoming around the turn of the 19th century, when fur dealers and native people in America used pelts as their currency. And he noted that the state now has issued its own stablecoin.

“Today, Wyoming is again exploring the monetary frontier, with the state government having moved to issue a public stablecoin – the Frontier Stable Token,” he said. “The symbolism is apt: we meet where the past and future meet to discuss how money should evolve without losing what makes it trustworthy.”