BNY Mellon Launches Blockchain-Based Tokenized Deposits for Faster Institutional Settlement

BNY Mellon, the world’s largest custodial bank, has taken a major step into blockchain finance by launching a platform that enables institutional clients to settle bank deposits on a blockchain. With nearly $58 trillion in assets under management, the Wall Street giant is positioning itself at the forefront of tokenization and digital asset infrastructure within traditional banking.

The new initiative allows BNY Mellon clients to mirror their existing deposit balances as tokenized representations on a private, permissioned blockchain. This system is designed to improve settlement speed, enhance liquidity management, and enable near real-time movement of funds, particularly in areas such as collateral and margin management. These processes are critical for large financial institutions that require reliable and efficient capital flows across global markets.

According to BNY Mellon, the blockchain-based settlement capability is now live on its Digital Assets platform. While tokenized balances appear on-chain, the bank continues to record the actual deposits on its traditional ledgers to remain fully compliant with regulatory requirements. This hybrid structure ensures that innovation does not come at the expense of regulatory alignment, risk controls, or operational resilience.

The move builds on BNY Mellon’s previous efforts to modernize its payments infrastructure. In 2024, the bank disclosed that it was testing tokenized deposits as part of a broader strategy to upgrade legacy settlement systems that are limited by business hours and slower processing times. By extending trusted bank deposits onto digital rails, BNY Mellon aims to offer institutional clients round-the-clock settlement capabilities within a secure and controlled environment.

The launch also reflects a wider trend among global banks exploring blockchain settlement and tokenization. JPMorgan recently introduced its JPMD token on Coinbase’s Base blockchain, while several European banks are collaborating on a MiCA-compliant euro stablecoin. As financial institutions increasingly seek always-on digital infrastructure, BNY Mellon’s blockchain deposit platform signals a significant shift toward tokenized finance becoming a core component of mainstream banking rather than an experimental concept.