In a financial sector undergoing rapid technological change, global custodian Bank of New York Mellon (BNY) has taken a major step forward.
On Friday, the 200-year-old institution announced the launch of a solution enabling the digital representation (“mirroring”) of deposit balances on its digital asset platform. This initiative is part of a broader strategy to integrate blockchain technology into traditional market infrastructures.
Bridging traditional finance and blockchain
BNY’s tokenised deposits for institutional clients are based on a hybrid architecture. The bank will create digital accounting entries on a private, secure blockchain that represent clients’ existing demand deposit claims.
To ensure maximum security and compliance, BNY maintains dual records: balances are tracked in traditional banking systems and also mirrored on the blockchain. This approach allows the bank to comply with risk management frameworks and regulatory reporting requirements while leveraging the advantages of decentralized technology.
Why BNY is introducing tokenised deposits for institutional clients
The shift toward 24/7 operational models requires financial institutions to be more responsive. Tokenised deposits help BNY Mellon address key challenges in today’s market:
- Liquidity efficiency: Tokenised deposits enable more precise management of collateral and margins.
- Reduced friction: Blockchain automation shortens settlement times compared to traditional systems.
- Payment programmability: Transfers can be triggered almost instantly according to predefined rules.
Carolyn Weinberg, BNY’s Chief Product and Innovation Officer, said:
“Tokenised deposits allow us to expand our trusted banking services into digital infrastructure. Clients can manage collateral, margins, and payments more efficiently within a scalable, resilient, and compliant framework.”
BNY, with nearly $58 trillion in assets under management, has been experimenting with tokenised deposits since last year as part of its broader effort to modernize global payment infrastructure and keep pace with the rapid development of blockchain finance.
See also: Blockchain Tokenization: Definition, How It Works, and Practical Applications
Leading partners for large-scale adoption
The success of tokenised deposits depends on adoption across the financial ecosystem. For this launch, BNY has partnered with both traditional institutions and fintech firms.
Early users include Citadel Securities, Intercontinental Exchange, Anchorage Digital, Circle, and Ripple Prime. Asset managers such as Baillie Gifford and WisdomTree, as well as specialists like DRW Holdings and Zero Hash, are also involved.
By connecting digital assets—such as stablecoins and tokenised money market funds—to trusted bank deposits, BNY aims to create a resilient, interoperable digital financial infrastructure.
The rise of a programmable financial system
BNY’s initiative marks a step toward normalizing digital assets within major global banks. Over time, these tools could enable the full automation of institutional cash flows, blurring the distinction between fiat currency and digital tokens within a unified infrastructure.
While the current phase focuses on collateral and margins, expanding into other financial transactions appears to be the next logical step in transitioning toward a more fluid, dematerialized global financial system.
Source: BNY
