BNY Mellon, the world’s largest custodian bank, is taking another major step toward blockchain integration — exploring tokenized deposits as part of an ambitious effort to modernize its $2.5 trillion daily payment operations.
According to a report by Bloomberg, the initiative aims to shift a portion of the bank’s vast global payment volume onto blockchain rails, enabling faster, round-the-clock settlement and reducing dependency on legacy banking infrastructure.
Carl Slabicki, BNY’s executive platform owner for Treasury Services, said the tokenized deposit project is part of the bank’s broader strategy to bring efficiency and flexibility to cross-border and domestic transactions.
“Tokenized deposits can help banks overcome legacy technology constraints, making it easier to move deposits and payments across their own ecosystems – and eventually, across the broader market as standards mature,” Slabicki told Bloomberg.
Unlike stablecoins, which are typically backed by securities or reserves held by third parties, tokenized deposits are issued directly by commercial banks and fully backed one-to-one by customer funds. This distinction gives them a regulatory advantage, as they represent a direct claim on a bank’s balance sheet — making them more compatible with existing financial frameworks.
Money market fund tokens. Source: Copper.co
BNY Mellon’s move underscores how some of the world’s largest financial institutions are embracing blockchain technology, not as a speculative investment, but as a tool to streamline settlement processes, enhance liquidity, and strengthen transparency within traditional finance.
BNY and Goldman Sachs Target Institutional Tokenization
The project follows another initiative from BNY Mellon and Goldman Sachs, which announced plans in July to launch tokenized money market funds aimed at institutional investors. The effort seeks to enable 24/7 access to liquidity, instant settlements, and transparent fund ownership — all recorded on Goldman’s private blockchain.
The initiative has attracted participation from major asset managers, including BlackRock, Fidelity, and Federated Hermes, signaling growing institutional momentum behind tokenized financial instruments.
BNY Mellon is also one of more than 30 financial institutions collaborating with SWIFT to test a blockchain-based shared ledger for international payments. The project could enable instant, cross-border transactions by linking tokenized assets and deposits across multiple banking networks.
Global Race for Tokenized Deposits Intensifies
BNY Mellon’s exploration comes as global banks increasingly test blockchain-based solutions for cross-border settlements.
In June, JPMorgan expanded its pilot program for JPMD, a proprietary tokenized deposit system that allows clients to transfer funds instantly between branches and across borders. Shortly after, HSBC introduced its own cross-border tokenized deposit service for corporate clients, emphasizing faster and cheaper international payments.
In Asia, SBI Shinsei Bank, DeCurret DCP, and Singapore-based Partior signed an agreement in September to jointly develop a multicurrency blockchain framework for real-time clearing and settlement.
Together, these initiatives highlight how tokenized deposits are emerging as the next frontier in digital finance — potentially reshaping how banks manage liquidity and process payments in an increasingly globalized economy.