BNY Opens Access to Tokenized Deposits for Institutional Clients

Source: Coinspaidmedia Original Title: BNY Opens Access to Tokenized Deposits for Institutional Clients Original Link: BNY Mellon opened access for institutional market participants to an on-chain platform for tracking cash balances. The new functionality is designed to accelerate settlements and liquidity management through the tokenization of bank deposits.

The U.S. financial group announced an expansion of its digital financial capabilities by introducing a mirrored on-chain representation of clients’ deposit balances. The solution is part of the bank’s strategy to tokenize deposits and create programmable money instruments for institutional market infrastructure.

BNY Mellon announced its intention to move part of its daily payment flows onto a blockchain, beginning testing of tokenized deposits to optimize payments.

Implementation Details

At the initial stage, the technology will be applied to collateral management and margin settlement processes. Participants will be issued digital records on a distributed ledger that reflect their existing demand deposit claims within the BNY system. From a legal and accounting standpoint, the deposits will continue to be recorded in traditional banking systems, ensuring compliance with regulatory requirements.

The solution was launched on BNY’s private blockchain and is fully integrated with the bank’s existing risk management, compliance, and internal control systems. This approach combines the advantages of on-chain settlement with institutional standards of reliability and oversight.

Strategic Vision

According to Carolyn Weinberg, BNY’s Chief Product and Innovation Officer, the bank views tokenized deposits as a key element in the transition of financial markets to a 24/7 operating model. The use of tokenized assets helps reduce settlement friction, improve liquidity efficiency in collateral and margin operations, and lay the groundwork for programmable payments and near-instant fund transfers.

BNY plans to support rules-based money transfers in near real time, further reducing operating costs and improving settlement predictability for institutional clients. Tokenized deposits will serve as a bridge between traditional banking infrastructure and digital instruments, including stablecoins and tokenized money market funds.

Participants and Scale

Early participants in the initiative include Anchorage Digital, Baillie Gifford, Circle, Citadel Securities, Galaxy, ICE, Invesco, Paxos, Ripple, WisdomTree, and other major players from both traditional and digital financial markets. Participants note that moving bank money on-chain enables round-the-clock settlements, greater transparency, and more flexible capital management.

BNY serves more than 90% of Fortune 100 companies and nearly all of the world’s largest banks. As of September 30, 2025, the bank held $57.8 trillion in assets under custody and administration and $2.1 trillion in assets under management.

Previously, BNY Mellon, in partnership with Securitize, launched a tokenized fund investing in AAA-rated collateralized loan obligation bonds.