BNY Mellon has launched on-chain digital representations of client deposit balances on its Digital Assets platform, marking the first step in its strategy to tokenize deposits for real-time settlement. The capability creates digital book entries on BNY’s private, permissioned blockchain that mirror participating clients’ existing demand deposit claims against the bank. Client balances continue to be recorded on the bank’s traditional systems to maintain regulatory and reporting integrity.
The launch focuses initially on collateral and margin workflow use cases, with early participants including financial institutions and digital-native firms. The bank said it aims to support rules-based, near real-time cash movements in the future to reduce settlement friction and enhance liquidity for institutional clients. “Tokenized deposits provide us with the opportunity to extend our trusted bank deposits onto digital rails,” Carolyn Weinberg, BNY’s chief product and innovation officer, said in a statement.
The capability operates under BNY’s established risk, compliance, and control frameworks. BNY described tokenized deposits as part of its broader digital infrastructure strategy, linking traditional banking systems with stablecoins and tokenized money market funds. The bank said tokenized deposits can reduce settlement friction, improve liquidity across collateral and margin workflows, and enable programmable payments and settlements, addressing institutional demand for faster asset movement, greater settlement certainty, and transparency.
BNY Mellon has begun representing client deposit balances on its Digital Assets platform as on-chain records. The digital entries run on the bank’s private, permissioned blockchain and mirror each participant’s demand deposit claims, while balances stay on traditional systems to preserve regulatory reporting. This approach maintains regulatory and reporting integrity while enabling on-chain visibility.
The initial focus is on collateral and margin workflows, with early participants including financial institutions and digital-native firms. The bank plans to support near real-time cash movements in the future to reduce settlement friction and boost liquidity for institutional clients. Tokenized deposits extend trusted bank deposits onto digital rails, according to the bank’s description of the capability.
BNY Mellon emphasizes governance within its risk, compliance, and control frameworks. Tokenized deposits are described as part of a broader digital infrastructure strategy that connects traditional banking with stablecoins and tokenized money market funds. The move aims to reduce settlement friction and enable programmable payments and settlements, addressing institutional demand for faster asset movement and greater settlement certainty.
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