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BNY Mellon has launched onchain digital representations of client deposit balances on its Digital Assets platform, marking the first step in the bank's strategy to tokenize deposits for real-time settlement.
The capability creates digital book entries on BNY's private, permissioned blockchain that mirror participating clients' existing demand deposit claims against the bank. Client balances continue to be recorded on the bank's traditional systems to maintain regulatory and reporting integrity.
The launch focuses initially on collateral and margin workflow use cases, with early participants including financial institutions and digital native firms. The bank said it aims to support rules-based, near real-time cash movements in the future to reduce settlement friction and enhance liquidity for institutional clients.
"As institutional markets move toward always on operating models, BNY is committed to innovating and helping define how cash moves across the modern financial system," Carolyn Weinberg, chief product and innovation officer at BNY, said in a statement. "Tokenized deposits provide us with the opportunity to extend our trusted bank deposits onto digital rails."
The capability operates under BNY's established risk, compliance, and control frameworks. The bank positioned tokenized deposits as part of its broader digital infrastructure strategy, which includes connecting traditional banking systems with stablecoins and tokenized money market funds.
BNY said tokenized deposits can help reduce settlement friction, improve liquidity efficiency across collateral and margin workflows, and enable programmable payments and settlements. The technology addresses institutional demand for faster asset movement with greater settlement certainty, transparency, and lower friction as global financial markets shift toward continuous operating models.
The bank framed tokenized deposits as "connective tissue" that will enable interoperability across its digital asset infrastructure, anchored in institutional trust, scale, and governance.
