BNY Mellon has launched a tokenized deposit service that turns client deposits into on-chain digital cash to enable 24/7 blockchain-based payments, collateral and margin movements, marking a major expansion of its institutional digital asset infrastructure.

Bank of New York Mellon has launched a tokenized deposit service for institutional clients that converts existing demand deposits at the bank into on‑chain representations on its private, permissioned blockchain. These tokens function as digital cash that mirrors clients’ deposit balances on BNY’s traditional ledgers, enabling blockchain-based payments as well as collateral and margin movements with the goal of supporting near‑24/7, real‑time settlement. The tokenized deposits sit fully within the conventional banking system, with balances still recorded in BNY’s core systems for regulatory, accounting and reporting purposes. The new service expands BNY’s broader institutional digital asset infrastructure, which already includes stablecoin payment rails and tokenized money market fund capabilities. BNY is initially focusing on collateral and margin workflows, creating on‑chain digital book entries that can be used to move collateral more quickly, reduce settlement frictions, and improve liquidity and operational efficiency in markets that increasingly operate on an “always‑on” basis. Early institutional participants include major financial and trading firms such as Intercontinental Exchange, Citadel Securities, DRW Holdings, Ripple Prime, Baillie Gifford, and Circle Internet Group, which are testing the system for secured financing and trading-related use cases. Strategically, BNY’s move positions a globally systemic custodian bank at the center of efforts to bring tokenized cash into regulated market infrastructure, competing with and complementing stablecoins and other tokenized real‑world assets. Commentators link growing U.S. bank interest in deposit tokens to evolving regulatory frameworks such as the GENIUS Act for stablecoins, which are encouraging institutions to explore on‑chain settlement within familiar bank-deposit structures rather than relying solely on non‑bank stablecoin issuers. Industry forecasts such as Standard Chartered’s projection that tokenized real‑world assets (excluding stablecoins) could reach about $2 trillion by 2028 are frequently cited to underscore why large banks like BNY are investing in tokenized deposit and digital asset infrastructure now.

✨ AI-generated background, compiled from web sources — not editorial content.

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