Tokenized deposits could reduce U.S. banks’ capacity to hold long-term interest-rate exposure by about $700 billion under a Dallas Fed scenario assuming a 10% rise in deposit-rate sensitivity, measured in 10-year equivalents rather than deposits leaving the system. A separate case found a 10% shorter deposit weighted average life could cut maturity-transformation capacity by roughly $580 billion, with about 80% of banks’ roughly $7 trillion in term risk supported by traditional deposit duration. Instant settlement, programmable deposit tokens and agentic AI could make deposits less sticky as customers chase higher yields within seconds, potentially pushing banks toward more liquid assets or costlier wholesale term debt and higher credit costs. Kula co-founder Chris Turner cautioned that token transfer speed is not the same as completed legal settlement of the underlying financial claim, which still depends on banks, custodians, clearing systems and regulatory registries. Unlike stablecoins, tokenized deposits remain regulated bank liabilities; banks are building shared networks including the BankChain Alliance, a Clearing House system backed by major U.S. banks, and Swift-linked transfers.