Global: BNY Launches Tokenized Deposits to Enable Real-Time On-Chain Settlement

BNY Mellon has taken a major step toward modernizing institutional cash management by launching tokenized deposits, enabling real-time, on-chain settlement between participating market participants. The initiative marks the first stage in BNY’s strategy to bridge traditional banking infrastructure with emerging digital financial rails.

The rollout allows for the on-chain mirrored representation of client deposit balances via BNY’s Digital Assets platform. Initially focused on collateral and margin workflow use cases, the solution creates digital book entries on a private, permissioned blockchain that correspond to clients’ existing demand deposit claims against the bank. While these tokenized entries operate on-chain, all balances remain recorded on BNY’s traditional systems to ensure regulatory reporting integrity and adherence to compliance and control frameworks.

BNY describes tokenized deposits as the “connective tissue” linking conventional banking with next-generation digital tools, including stablecoins and tokenized money market funds. This approach provides clients with faster, more flexible access to liquidity while preserving the bank’s established risk management and regulatory compliance standards.

Carolyn Weinberg, Chief Product and Innovation Officer at BNY Mellon, stated:

“As institutional markets shift toward always-on operating models, BNY is committed to innovating and shaping how cash moves across the modern financial system. Tokenized deposits allow us to extend trusted bank deposits onto digital rails, enabling clients to operate more efficiently across collateral, margin, and payments, all within a framework designed for scale, resilience, and regulatory alignment.”

Early adopters of the initiative include a diverse mix of traditional financial institutions and digital-native firms such as Anchorage Digital, Circle, Digital Asset, Baillie Gifford, Citadel Securities, DRW Holdings, Galaxy, Paxos, and Ripple Prime. The pilot demonstrates how tokenized deposits could transform the future of institutional cash management, combining speed, transparency, and regulatory oversight in a single integrated ecosystem.

By enabling on-chain settlement while maintaining regulatory compliance, BNY’s tokenized deposits highlight the growing intersection between financial compliance, digital asset innovation, and regulatory technology solutions, paving the way for broader adoption of blockchain-enabled cash and payment infrastructures.