Key Takeaways
- BNY Mellon launches tokenized deposit services on its Digital Assets platform, mirroring client deposit balances for real-time transactions.
- The initial focus is on collateral and margin workflows using a private blockchain while maintaining traditional record-keeping for regulatory purposes.
BNY has initiated the tokenization of deposit balances to support near real-time, on-chain settlement between institutional participants, the company announced Friday.
The capability is enabled through tokenized bank deposits. When a client holds cash at BNY, the bank creates a digital version of that deposit on its private blockchain. These “on-chain book entries” mirror the client’s actual balance, ensuring the real deposit stays safely in BNY’s regulated system.
With this structure, clients can move that value across blockchain rails in near real time to meet margin requirements or transfer collateral between institutions.
The initial rollout focuses on collateral and margin workflows and is built on a private, permissioned blockchain integrated with BNY’s existing systems.
Over time, tokenized deposits are expected to support programmable payments, improve liquidity efficiency, and serve as a foundational component of the always-on market infrastructure, BNY Chief Product and Innovation Officer Carolyn Weinberg said in a statement.
Several industry leaders have participated in the initial launch of BNY’s tokenized deposit service, including Intercontinental Exchange (ICE), Anchorage Digital, Citadel Securities, DRW Holdings, Circle, Ripple Prime, Baillie Gifford, WisdomTree, and Zero Hash, to name a few.
Commenting on the launch, Anchorage Digital CEO Nathan McCauley said tokenized deposits will move institutional finance closer to a programmable future by allowing money to move at the speed firms require within a framework they already trust.
Theo Golden, tokenization lead and investment manager at Baillie Gifford, said the tokenization of cash is a critical enabler of broader asset tokenization and a turning point for market infrastructure.
He added that the technology has crossed a credibility threshold and that BNY’s role as a regulated institution in bringing tokenized money into the core of the financial system demonstrates how interoperability and efficiency can be achieved at institutional scale.
Source: https://cryptobriefing.com/bny-launches-tokenized-deposit-services-digital-assets-platform/
