A Moment of Clarity: Why Rewriting the Rules of Ownership of Money Really Matters

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Thomas P. Brown is Senior Counsel at a national law firm and serves on several boards. He previously worked at Visa during its corporate restructuring and IPO process.

Since the 1913 creation of the Federal Reserve, banks’ ledgers have established ownership of money. That is about to change.

Recent legal developments created an alternative way to own and transfer money in the United States that can operate outside the traditional banking system. These developments have profound implications, not just for payments but for the roughly $600 billion banks — not depositors — earn annually on $16 trillion in deposits.¹

Why is this happening? A basic but often overlooked fact: money is property.

The Nature of Money as Property

We tend not to think of money as a form of property. But it is. Money, like real estate, clothes, and furniture, is something that we own.

Unlike a house or a chair, however, it is designed to be fungible. As the saying goes, “a dollar is a dollar.” Each bill is a perfect substitute for another of the same denomination. Fungibility is what makes money the lubricant for commerce.

But fungibility has downsides. For paper notes and coins, physical possession establishes ownership. If you drop a twenty-dollar bill on the sidewalk and someone else picks it up, the finder can legally keep it. Likewise, if a thief steals physical currency from you and uses it to buy something, the seller can keep that currency.

Money in electronic form also has special qualities. Ownership is established through control of the account with which that money is associated. To transfer ownership of electronic money, you instruct the bank holding your account to connect with the bank of the person or business you want to pay and both banks update their ledgers — debiting your account and crediting the payee’s account. The alteration of the ledgers changes ownership of money.

The payment systems that we are most familiar with have trained us — consumers, merchants, even many payment professionals — to conflate the message with the transfer. We think of payments as information flow rather than ownership transfer. But it is the ledger change, not the message instructing it to happen, that causes money as property to change hands.

The significance of the legal changes that make stablecoins and other tokenized forms of value exchange possible come into sight only when you focus on the transfer of money ownership, not the message initiating it.

What’s Changing Now

Three recent legal developments have created a new way to transfer ownership of money in the United States:

UCC Article 12 creates a new legal framework for “controllable electronic records.” These are digital bearer instruments. Under the new law, ownership is established through “control” of the token embodying them — similar to how possession of a physical dollar bill establishes ownership. If you control the private key associated with a token, you own it. Transfer the control, and you transfer the ownership. No bank ledger required.

The GENIUS Act establishes a federal regulatory framework for payment stablecoins. It treats them as a financial instrument distinct from both bank deposits and securities. GENIUS requires stablecoin issuers to maintain high-quality liquid reserves backing each token and subjects them to regular attestation and examination. This creates a supervisory regime to ensure that stablecoins will maintain their value. The Act also explicitly prohibits the Federal Reserve from issuing a central bank digital currency, keeping stablecoin  infrastructure in private hands.

Recent prudential regulatory guidance from the OCC, Federal Reserve, and FDIC clarified that banks can custody digital assets like stablecoins and issue deposit tokens — tokenized representations of bank deposits that can be transferred on blockchain rails. OCC Interpretive Letter 1174 and subsequent guidance established that these activities are permissible banking functions, removing a major source of regulatory uncertainty.

Together, these three developments create the legal infrastructure for a new way to establish ownership of digital money in the U.S. Ownership is established through control of a digital token. And the parallel regulatory regimes — one for stablecoins and another for deposit tokens — ensure that the tokens hold the value they represent.

Why This Reframes Stablecoins and Deposit Tokens

Stablecoins and deposit tokens represent something more than another payment rail. They represent a different way to own money.

Stablecoins are bearer instruments. When I send you USDC, I transfer ownership of that asset to you in that moment. I am not sending a payment instruction that triggers settlement later. It is settlement. The ownership transfer and the transaction are the same thing. Sending a stablecoin is more akin to handing someone a twenty-dollar bill than swiping a card.

Deposit tokens occupy a middle ground. They function like digital negotiable instruments — control of the token that represents the deposit conveys ownership of the deposit. However, existing and contemplated deposit token systems typically operate within permissioned networks. Unlike stablecoins, which can be transferred freely to any wallet address, deposit tokens generally require both parties to be verified participants in a specific network. Think of them as digital checks that clear instantly but can only be deposited at participating institutions. This makes them bearer instruments within defined boundaries — still a fundamental shift from traditional payment messaging, but with built-in compliance rails.

Both represent a return to payments-as-ownership-transfer rather than payments-as-messaging. Both can do this while operating on modern digital infrastructure with all the programmability, composability, and speed that implies.

Why This Matters

Digital ownership of money provides an alternative to the complex web of intermediated settlement that characterizes traditional banking. “Better, faster, cheaper” is a mantra in the payment industry, and tokenized transfers represent a major improvement in speed, cost, and programmability.

The effects on the $1.8 trillion payment industry will be substantial. But the real implications are for what happens to money at rest in the $6.8 trillion banking industry. That’s because ownership holds more value than information exchange.

Historically, it was difficult and expensive to move large amounts of money in a short time. In the U.S., the only place from which firms and households could move significant amounts of money was a bank. 

Banks today generate significant revenue — both passively and actively — by serving as the ledgers of record for money at rest. The passive revenue takes the form of the convenience premium: the difference between what banks pay out on short-term deposits and what they can earn through essentially costless and riskless transactions with the Federal Reserve and other banks. The active revenue is the markup on access to interbank settlement systems maintained by the Federal Reserve and others.

These are very large pools of revenue. According to the Federal Reserve, banks held approximately $5.6 trillion in demand deposits and $10.9 trillion in liquid deposits as of September 30, 2025. According to the FDIC, as of October 20, 2025, the average yield on checking accounts and NOW accounts weighted across banks and credit unions is 0.07%. Yields for liquid deposits such as short-term savings and money market accounts, again weighted by volume, are slightly higher at 0.59%. The overnight bank lending rate, meanwhile, is 3.87%. This means that banks pocket roughly $600 billion annually for providing convenient access to money. McKinsey estimates that banks in North America collected $700 billion in revenue for processing payments. By the middle of next year when GENIUS is fully in effect, that $1.3 trillion in revenue is suddenly contestable.

A Historic Moment

This is the most important moment in U.S. payments since 1913. We have created a legal regime that allows for disaggregation of functions that have been bundled together since the Federal Reserve System was created: ownership of money, the transfer of that ownership, and the collection of tolls on those transfers.

This shift raises legitimate concerns that the industry will need to address. Traditional banking infrastructure includes consumer protections — fraud prevention, transaction reversibility, account recovery mechanisms — that have evolved over decades. Tokenized money systems will need to develop equivalent protections, likely through a combination of technology, insurance products, and new regulatory frameworks. The permissioned nature of many deposit token systems suggests one path forward. Smart contract-based controls offer another. But these solutions are still emerging, and policymakers will need to keep an eye on them — in addition to keeping an eye on the potential impacts of hundreds of billions of dollars of revenue leaving traditional banks.

These concerns should not distract us from the bigger picture. The 1913 bundle is now unbundled. Stablecoins and deposit tokens are more than a better, faster, cheaper way to make payments. They represent a different way to own money. The question isn’t whether this changes banking. It’s which banks will adapt fast enough to remain relevant.

The opinions shared in this article are the author’s own and do not reflect the views of any organization they are affiliated with.

^[1]  $5.668.6B (Demand Deposits) x (.0387 (effective Fed Funds rate)-.0007 (national deposit rate)) + $10,918B (other liquid deposits) x (.0387-.0059 (national rate on money market accounts)=$600.1B

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