“Efforts from these early adopters have centered around the tokenization of U.S. dollar deposits to modernize B2B payments, which have been slow to evolve. Only a fraction of the $23 trillion in B2B payments made in the U.S. annually are digital. Astonishingly, 42% of B2B transactions are still made by check, according to Deloitte.
Tokenization accelerates the innovation curve for B2B payments. It eliminates many of the existing limitations of slow, antiquated payment rails such as cut-off times, overnight or multi-day processing and restrictions on transaction sizes.
Tokenization accomplishes this by creating a digitized representation of an asset. For each dollar deposited at the institution, a token is created that represents that dollar. These tokens are backed 1:1 by cash deposits that never leave the bank – a feature that has satisfied bank regulators.
