According to an analysis published on Aug. 25 by the Federal Reserve Bank of Dallas, AI-directed bank accounts could rapidly move deposits between institutions. This shift risks weakening the stable funding advantage that banks traditionally use to finance long-term credit.
While demand deposits can technically be withdrawn at any time, balances typically remain at banks for years, and deposit rates usually rise by less than overall market rates. This behavior allows deposits to function partly like long-duration funding. The Dallas Fed approximates this effective duration as the weighted average life multiplied by one minus the deposit beta, which measures the responsiveness of deposit rates to short-term rates.
Instant settlement capabilities would allow yield-sensitive customers to switch banks quickly, with automated moves facilitated by programmable rules and agentic AI. In June 2026, The Clearing House announced an initiative aimed at developing 24/7, interoperable tokenized commercial-bank money, including automated and agentic-commerce applications.
Using commercial-bank balance sheets from July 15 and its own duration assumptions, the Dallas Fed estimated approximately $7 trillion of asset-side interest-rate exposure in 10-year equivalents. Of that total, roughly $5.84 trillion was supported by the duration characteristics of deposits other than large time deposits, helping banks hold assets whose values are sensitive to interest-rate changes.
Under a sensitivity case featuring a 10% increase in deposit price sensitivity and assuming a four-year weighted average life, aggregate duration-risk appetite decreased by about $700 billion in 10-year equivalents. A separate 10% reduction in weighted average life lowered modeled maturity-transformation capacity by about $580 billion.
A 10-year equivalent converts an exposure into the interest-rate risk of a comparable position in 10-year Treasuries, though the actual credit effect depends on how individual banks adjust their assets and funding structures.
To adapt, banks could issue more term debt to maintain their lending composition, though the Dallas Fed notes that wholesale funding would likely raise borrowing costs for consumers and businesses. Alternatively, institutions could hold more reserves and Treasuries to guard against faster and less predictable outflows, leaving less capacity for illiquid credit.
A 2025 Central Bank of Brazil paper similarly found that increased usage of the Pix instant-payment system led to higher liquid-asset holdings and reduced liquidity transformation, serving as evidence that instant payments can alter bank liquidity behavior, even though Pix is not a direct equivalent to US tokenized deposits.
Tokenized deposits remain in the early stages of development, and the overall magnitude of the impact remains uncertain. The authors of the analysis noted that their views do not necessarily represent those of the Dallas Fed or the Federal Reserve System.
