Dallas Fed: Tokenized Deposits Could Reduce U.S. Banks' Lending Capacity by $700 Billion

According to CoinDesk, two economists from the Dallas Fed estimate that if tokenized deposits increase depositors' interest rate sensitivity by 10%, U.S. banks' capacity to hold long-term interest rate risk could decline by approximately $700 billion. Another scenario shows that if tokenization causes deposits to leave banks 10% earlier, their ability to absorb interest rate risk on long-term loans and securities could fall by around $580 billion.