BNY Mellon Launches Tokenized Deposits: A Step Toward Blockchain Payments in Traditional Banking

Bank of New York Mellon (BNY Mellon), the world's largest custodial bank with over $55 trillion in assets under management, has officially launched its tokenized deposits service. This allows clients to transfer funds via blockchain networks, representing an on-chain form of deposits held in BNY accounts. This move is part of the bank's expansion into digital assets and aligns with the provided user information about exploring possibilities for tokenized deposits and blockchain-based payments.

According to Bloomberg data, the service is aimed at using tokenized deposits for collateral, margin transactions, and faster payments with potential 24/7 operation. Tokenized deposits are created within the existing banking system as an on-chain reflection of client balances, distinguishing them from stablecoins: they are backed by bank deposits and allow interest accrual. This facilitates the tokenization of securities, such as stocks and bonds, enabling quick settlement.

Partners in the initiative include Intercontinental Exchange Inc. (ICE), which integrates tokenized deposits into its clearing houses for round-the-clock trading, Citadel Securities, DRW Holdings, Ripple Prime (a division of Ripple Labs Inc.), Baillie Gifford, Circle Internet Group Inc., and Galaxy Digital Inc. Carolyn Weinberg, BNY's chief product and innovation officer, noted:

"This is about connecting traditional banking infrastructure to new digital rails in a way that institutions trust." Steve Kurtz from Galaxy Digital added that tokenized deposits introduce programmability and 24/7 settlement "into the heart of the banking system."

Research on X shows enthusiasm from the #RWA (Real World Assets) community. For example, user @BitBlitz noted:

"BNY Mellon just launched tokenized deposits on their internal permissioned chain, but only for institutions. TradFi is diving deeper into blockchain without public networks."

Another post from @starbaseacc highlights the potential for 24/7 operations and accelerated payments, linking to Bloomberg. Earlier discussions, like from @RWAwatchlist_, pointed to BNY's pilot projects back in October 2025, preceding the full launch.

This launch follows similar initiatives by competitors: JPMorgan with JPM Coin and HSBC with expanded tokenized deposits. Experts believe this will boost asset tokenization, especially after the adoption of the Genius Act for stablecoins, bridging traditional finance with the crypto ecosystem. For the crypto industry, this signals mass adoption of blockchain in the institutional sector, potentially increasing trading volumes and efficiency.