- BNY Mellon launched tokenized deposits to speed up institutional settlements using a private blockchain system.
- The platform focuses on collateral and margin flows while keeping compliance within existing banking systems.
- Major institutions are adopting tokenized deposits as regulation supports blockchain use inside traditional banking.
BNY Mellon confirmed plans to issue digital representations of institutional client deposits on its private blockchain. The service applies to deposits already held within the bank’s balance sheet. These digital records will connect with existing banking systems. As a result, clients will retain standard withdrawal access without operational changes. The initiative targets institutions seeking faster settlement and better liquidity visibility within regulated markets.
The bank will operate the system on a private and permissioned blockchain. Access will remain limited to approved institutions and digital-native firms. BNY described the launch as a move from internal exploration to live financial infrastructure. The decision reflects growing demand for blockchain tools that function within traditional banking frameworks.
Collateral and Margin Drive Early Use
BNY plans to focus the initial phase on collateral and margin requirements. These activities often require rapid movement of funds during volatile trading periods. Tokenized deposits aim to reduce settlement delays linked to legacy payment systems. Balances will appear on-chain throughout the trading day to support operational needs.
Compliance and recordkeeping will remain within BNY’s existing internal systems. However, operational balances will still reflect on the blockchain. This structure allows the bank to maintain regulatory oversight while improving intraday liquidity management. BNY also plans to expand the system toward continuous availability. The goal includes supporting activity beyond standard market hours.
Integration Across Digital Asset Platforms
The deposit tokens will connect across BNY’s internal digital platforms. They will also integrate with a tokenized money market fund developed alongside Goldman Sachs. That fund launched in July and focuses on institutional cash management. The linkage supports broader use of tokenized assets within regulated environments.
Several digital asset firms contributed input during development. These firms include Anchorage Digital, Circle, Paxos, Securitize, and Ripple Prime. Their involvement highlights closer coordination between traditional banks and digital infrastructure providers. BNY launched its digital assets unit in 2021.
In 2022, the bank expanded into private key management and crypto custody services. The tokenized deposit platform builds on those efforts. Moreover, in 2024, BNY Mellon partnered with Ripple to drive forward tokenization.
Scale, Regulation, and Competitive Landscape
BNY safeguards $57.8 trillion in client assets across global markets. Assets under management reached $2.1 trillion as of September. Any digital deposit offering must therefore meet strict custody and compliance requirements. The tokenized deposits do not create new bank accounts. Instead, they represent existing funds already held at the bank. Clients retain full withdrawal rights.
Initial users include Intercontinental Exchange, Citadel Securities, DRW Holdings, Circle, and Baillie Gifford. ICE plans to support the deposits across its clearinghouses on a continuous basis. The launch follows earlier work within BNY’s treasury unit, which processes about $2.5 trillion daily. Tokenized deposits differ from stablecoins because they remain direct bank liabilities.
Recent U.S. legislation has clarified rules around digital dollar instruments. This regulatory clarity has encouraged banks such as JPMorgan, HSBC, and Barclays to advance similar initiatives. Last year, Deutsche Bank announced plans to explore stablecoins and tokenized deposits.
