Tokenized Bank Deposits Face Critical Assessment from Columbia Business School Professor

In a recent analysis, Omid Malekan, an adjunct professor at Columbia Business School, has raised significant concerns regarding the viability of tokenized bank deposits as financial instruments. According to Malekan, these digital representations of traditional bank deposits fall short when compared to stablecoins in terms of flexibility and technical capabilities. He emphasized that stablecoins, which are typically pegged to fiat currencies like the U.S. dollar, offer superior features such as enhanced interoperability, faster transaction speeds, and broader accessibility across decentralized platforms. Tokenized bank deposits, by contrast, are constrained by their reliance on existing banking infrastructures, limiting their utility in the rapidly evolving digital economy. Malekan’s critique highlights potential hurdles for widespread adoption, noting that without substantial innovation, tokenized deposits may struggle to compete with more agile alternatives. This perspective comes amid growing interest in digitizing traditional financial assets, underscoring the need for products that can meet the demands of modern crypto ecosystems while ensuring reliability and user convenience.