TLDR
- Alibaba.com will use tokenized deposits backed by the U.S. dollar and euro to streamline cross-border payments.
- The system will run on JPMorgan's blockchain infrastructure, enabling faster settlement with fewer intermediaries.
- Alibaba plans to begin with bank-issued digital tokens and may consider stablecoins later.
- Tokenized deposits differ from stablecoins because they sit directly on a regulated bank's balance sheet.
- The move signals a major shift toward blockchain-based settlement in global trade.
Alibaba has spent the last decade building the digital rails of global trade. Now, it's preparing to upgrade those rails again - this time with blockchain at the center. The company's global B2B marketplace, Alibaba.com, is moving to support tokenized versions of major fiat currencies, aiming to cut out unnecessary middlemen, speed up settlements and reduce the friction that still slows down international commerce. It's a shift that feels overdue. If you've ever sent money overseas - or watched a business attempt to pay a supplier across borders - you already know how messy the current system can be. Payments bounce across correspondent banks, fees stack up, and settlements drag for days. Alibaba and JPMorgan believe tokenized deposits can remove a chunk of that inefficiency.
The plan was revealed this week when Kuo Zhang, president of Alibaba.com, told CNBC that the platform will begin using tokenized U.S. dollars and euros through a partnership with JPMorgan. The new model leans directly on JPMorgan's blockchain-based JPMD infrastructure, a network designed to move bank-issued digital tokens quickly and securely between institutional clients.
It's a step that blends traditional finance with Web3, without crossing into the regulatory minefield of full-blown stablecoins. And for Alibaba - a company that moves billions in goods every year between buyers and suppliers - it could fundamentally reshape how businesses move money across borders.
Why Alibaba Is Starting With Bank-Issued Digital Tokens
One of the clearer points in Zhang's interview was the company's decision to focus first on tokenized deposits issued directly by regulated banks, not stablecoins. Zhang explained that tokenized deposits provide cleaner regulatory footing and operational clarity - two things that matter when you operate a global trade engine involving thousands of small and medium-sized businesses spread across dozens of jurisdictions.
Tokenized deposits, unlike most stablecoins, live directly on a bank's balance sheet. That matters. They come with built-in oversight, clearer accounting rules and none of the run risk that regulators often associate with privately issued stablecoins. It doesn't mean Alibaba is ruling out stablecoins forever. In the interview, Zhang acknowledged that the company is "exploring the possibility of adopting stablecoins in the future," but added that bank-issued tokens offer the smoother path right now.
For a platform with Alibaba's reach, conservative first steps seem logical.
The Problem Alibaba Wants to Solve
To understand why Alibaba is making this move, it helps to picture a typical foreign payment today. A U.S. buyer paying a Chinese supplier might see the funds move through:
- Their local bank
- A correspondent bank
- A receiving bank in another country
- Intermediaries that handle FX conversions
- Compliance layers at every point of contact
- Each step adds time. Each step adds cost.
And while payments have digitized over the last decade, the underlying system remains stitched together with legacy rails. Tokenized currency aims to sidestep most of this mess. If the payment is denominated in a tokenized deposit - say a digital version of the U.S. dollar - it can move directly across a blockchain system designed for fast settlement, without the payment having to pass through a chain of correspondent banks.
This is the vision behind the partnership with JPMorgan. The bank's JPMD infrastructure already handles tokenized deposits for large institutions, and integrating Alibaba's buyers and suppliers into that system could compress settlement times from days to minutes.
What Tokenized Deposits Actually Change
Tokenized money isn't new, but its use in mainstream corporate payments has been slow to take hold. Alibaba's move suggests we may be seeing a turning point. Here's the clearest way to understand the shift: Tokenized deposits = A digital dollar or euro issued by a regulated bank, recorded on blockchain, and transferable 24/7.
In practice, that means:
- Faster settlement
- Reduced reliance on intermediary banks
- Automated compliance and traceability
- Lower FX and routing friction
- Real-time reconciliation for both sides of a trade
These aren't small improvements. They address long-standing issues that even the largest companies face, especially when dealing with suppliers in emerging markets or regions with stricter currency controls. For suppliers, faster settlement means faster access to cash. For buyers, it means fewer surprises in routing fees. And for both sides, blockchain provides a transparent ledger without exposing private financial data.
How This Fits Into the Global Rise of Tokenized Finance
Alibaba isn't alone in noticing the value of tokenized money. Around the world, banks, regulators and asset managers are gradually warming to the idea that tokenization is simply a better way to move value at scale.
In the U.S., BlackRock's BUIDL fund has already surpassed billions in tokenized U.S. Treasurys. Payment firms are experimenting with tokenized cash equivalents. Several global banks have issued tokenized versions of their own deposits. The IMF and BIS have published reports pushing the concept. And central banks - from Singapore to Switzerland to Brazil - are running tokenization pilots for wholesale settlement.
Alibaba joining that movement signals that tokenization isn't just a banking experiment anymore. It's entering the commerce layer, where speed and efficiency directly influence real-world business outcomes.
Final Thought : A Step Toward a More Efficient
Blockchain payments have always carried the promise of instant value transfer. But real-world adoption depends on whether major players integrate it into their core workflows. Alibaba's pivot to tokenized deposits is one of the largest corporate moves to date - not because it's flashy, but because it's practical. It solves a real bottleneck in global trade. And it integrates directly with regulated banks rather than bypassing them.
In a world where cross-border settlement remains slow, expensive and unpredictable, the promise of sending a tokenized dollar across a blockchain with near-instant finality feels like the logical next step. With Alibaba at the table and JPMorgan running the rails, that future is suddenly easier to imagine.
