BNY Mellon Launches Tokenized Deposits for Institutions

Bank of New York Mellon, one of the world's largest custodian banks, launched a tokenized deposit service for institutional clients on Friday, enabling faster and more efficient movement of funds across blockchain infrastructure while maintaining traditional banking safeguards.

The initiative creates digital representations of client deposit balances on the bank's private, permissioned blockchain. These tokenized deposits serve as book entries mirroring existing demand deposit accounts, with balances continuing to be recorded in BNY Mellon's conventional systems to ensure regulatory compliance, accounting accuracy, and reporting consistency. According to the bank, the service initially supports workflows involving collateral management, margin requirements, and payments, allowing for programmable, near-real-time cash movements.

BNY Mellon described the launch as a step toward bridging traditional finance with digital assets. "Tokenized deposits provide us with the opportunity to extend our trusted bank deposits onto digital rails, enabling clients to operate with greater speed across collateral, margin, and payments, within a framework built for scale, resilience, and regulatory...