The Bank of New York Mellon (BNY Mellon), custodian of $57.8 trillion in assets, officially launched its BNY Mellon tokenized deposit service for six institutional clients. This exploratory project represents a key step in connecting traditional banking infrastructure with emerging digital ecosystems, according to Carolyn Weinberg, BNY’s chief product and innovation officer.
The bank currently processes nearly $2.5 trillion daily through its treasury unit. Its tokenized deposit service will create a blockchain-based digital representation of bank deposits, differing from stablecoins in that it is a direct liability and interest generator for the bank.
A wave of tokenization driven by traditional banking
This decision by the company comes from the accelerated trend led by large global banks following the passage of the Genius Act in the United States. Regulation, once an obstacle, has now become a tailwind for innovation in digital assets, a position defended by CEO Robin Vince, who called tokenization a “megatrend.”
For its part, BNY is joining a race in which its peers are also advancing rapidly. For example, JP Morgan Chase began distributing its JPM Coin to institutional clients in November. Meanwhile, HSBC Holdings plans to expand its tokenized deposit service to corporate clients in the US and the United Arab Emirates during the first half of this year, this turning an internal exploration into a real and competitive financial tool.
BNY Mellon’s tokenized deposit service strategy for institutions
Broadly speaking, the main value of BNY Mellon’s tokenized deposit service lies in operational efficiency. In other words, the tokenized deposit service is designed for collateral and margin transactions, with programmable features that enable automated settlements to “make payments faster.” An ICE spokesperson confirmed that they will work to support these deposits in their clearinghouses 24 hours a day, a goal that BNY is also pursuing.
Today, the ability to operate continuously and automate processes is a key advantage over legacy systems. This is particularly relevant for the six founding clients, who handle massive volumes and need to move collateral and cash quickly and securely between different platforms.
Looking ahead to the near future, BNY Mellon’s entry will likely intensify competition and innovation among large banks. Initial success could lead to rapid expansion of BNY Mellon’s tokenized deposit service to more clients and use cases, bringing closer the horizon where global financial transactions operate in a programmable, instantaneous, and seamless manner.