- BNY Mellon launches tokenized bank deposits for institutional clients on a proprietary permissioned blockchain.
- The tokens represent on‑chain cash balances designed for collateral, margin and programmable payments.
- Early adopters include Intercontinental Exchange, Citadel Securities, DRW, Ripple Prime, Circle and other major institutions.
- The move aligns with a broader shift toward 24/7 capital markets, regulated stablecoins and large‑scale asset tokenization.
BNY Mellon is taking a new step into digital finance with the launch of tokenized bank deposits aimed at institutional customers. The initiative introduces a blockchain-based representation of traditional cash balances, designed to fit into the bank’s existing custody and payments infrastructure.
Instead of radically replacing today’s financial pipes, the project seeks to link legacy banking rails with always-on digital networks. In practice, that means large trading firms, asset managers and other institutions can move value on-chain while still dealing with a familiar, regulated bank on the back end.
What BNY Mellon’s tokenized deposits actually are
At the core of the new service are on-chain claims on deposit balances held at BNY Mellon. These tokenized deposits mirror cash held in accounts at the bank, but they live on a permissioned blockchain operated internally by BNY rather than on a public network.
In other words, the tokens act as digital IOUs issued by the bank: each unit represents a claim against BNY Mellon in the same way that a standard deposit does, but is transferable and programmable via blockchain rails. The bank’s own network is permissioned, so access is limited to vetted institutional participants and partners.
Initially, the bank plans to use these on-chain deposits to support collateral and margin workflows. By allowing collateral to move and settle around the clock, BNY Mellon aims to give clients greater flexibility when posting margins for trading, clearing or derivatives activities.
Beyond collateral, the architecture is intended to enable programmable payments and near real-time cash movements. Smart contract-style logic can be layered onto the tokens so that funds move automatically once pre-defined conditions are met, cutting down on manual processes and operational risk.
The launch reflects BNY’s view that global markets are shifting toward an “always-on” operating model. Traditional banking windows, limited settlement cycles and a web of intermediaries are increasingly at odds with a digital economy where trading never really stops.
Why BNY Mellon is pushing tokenization now
BNY Mellon, a global financial services group with more than $57.8 trillion in assets under custody, has been gradually expanding its footprint in digital assets over the past several years. The introduction of tokenized deposits is the latest expression of that strategy.
From the bank’s perspective, institutions are actively hunting for faster, more transparent ways to shift assets across jurisdictions and platforms. Blockchain infrastructures, even when permissioned, can deliver faster settlement, continuous availability and better auditability than many legacy systems.
By turning traditional deposits into blockchain-native instruments, BNY Mellon wants to help clients unlock dormant liquidity. Tokenized balances can be mobilized more efficiently for collateral and margin, or embedded into automated payment flows that react instantly to market events.
The move also arrives at a time when Wall Street is investing heavily in tokenization of real-world assets. Major banks and market operators are running pilots and live services that represent everything from money-market fund shares to government bonds and repo transactions as tokens on various types of ledgers.
BNY Mellon’s decision to start with deposits is a way to anchor tokenization to one of the most familiar instruments in finance – cash in the bank. For institutions wary of jumping directly into crypto-native assets, a regulated deposit token issued by a systemically important bank can feel like a more natural starting point.
Who is using BNY’s tokenized deposits at launch
BNY Mellon is rolling out the service with a roster of high-profile early adopters from trading, infrastructure and digital asset circles. The initial group is meant to showcase both traditional and crypto-native use cases.
Among the first participants is Intercontinental Exchange (ICE), the operator behind major venues such as the New York Stock Exchange. ICE’s involvement signals that tokenized cash could plug directly into mainstream market plumbing, including exchanges and clearinghouses.
The bank is also working with Citadel Securities and DRW, two large trading firms known for their presence in global markets. For these actors, tokenized deposits can help streamline collateral posting, intraday liquidity management and cross-venue fund movements.
On the digital asset side, the client list includes Circle, issuer of the USDC stablecoin, along with Ripple Prime, Galaxy and Paxos. These companies operate in and around crypto markets, stablecoins and tokenized assets, and they represent potential heavy users of 24/7 collateral and settlement solutions.
Other institutional names, such as Invesco and Baillie Gifford, are also cited among the participants, highlighting interest from mainstream asset managers who see tokenization as a tool to modernize portfolio operations and liquidity management.
Connecting legacy banking to 24/7 digital markets
A central goal of the project is to bridge traditional banking infrastructure with “always-on” digital channels. Rather than running two parallel universes, BNY Mellon is trying to weave tokenized cash into the same risk, compliance and operational frameworks that support its core business.
The timing overlaps with a broader regulatory and market discussion in the United States around moving toward 24/7 capital markets. In September 2025, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) issued a joint statement suggesting that expanding trading hours could better reflect an economy that no longer sleeps.
Traditional infrastructures, with batch-based settlements and tight opening hours, leave investors and traders unable to respond to events overnight, on weekends or on holidays. That rigidity can amplify risk during periods of volatility or when news breaks outside standard market sessions.
Blockchain-based systems, by contrast, can operate around the clock with fewer intermediaries. Transfers settle in minutes or seconds rather than days, cross-border frictions are lower and operational handoffs are reduced. Tokenized deposits tap into these properties while preserving the legal and regulatory characteristics of a bank account balance.
For BNY Mellon, offering tokenized cash is framed as a way to let clients operate in “always-open” environments without abandoning the protections of traditional banking. The bank can still apply its usual controls around KYC, AML, risk management and reconciliation, while clients experience near-instant movements of value across integrated venues.
How tokenized deposits differ from stablecoins
Even though both instruments can exist on-chain, tokenized deposits are not the same as public stablecoins. In BNY Mellon’s case, the tokens are issued on a proprietary, permissioned blockchain and are available only to approved institutional users.
Each token corresponds directly to a claim on a bank deposit, backed by the bank’s balance sheet. Stablecoins, on the other hand, are typically issued by specialized entities and backed by reserves such as cash and short-term securities. They circulate on public networks and can be held by a broad range of users, including retail wallets.
BNY Mellon has also been active in the regulated stablecoin reserves space. In November 2025, the bank launched the BNY Dreyfus Stablecoin Reserves Fund (BSRXX), a money market fund aimed at institutional investors and U.S. stablecoin issuers.
The fund is structured to help issuers and other institutions hold reserve assets in line with requirements under the U.S. GENIUS Act. While the fund itself does not invest in stablecoins, it offers a compliant vehicle to park assets that back those tokens.
This dual track – supporting stablecoin reserves while issuing tokenized deposits – underscores BNY Mellon’s broader digital strategy. One leg focuses on strengthening the infrastructure around public stablecoins; the other creates a bank-native digital cash instrument for institutional use cases.
The regulatory backdrop: GENIUS Act and market growth
The GENIUS Act, passed in the U.S. in 2025, introduced a clearer regulatory framework for dollar-pegged stablecoins. Among other provisions, it requires issuers to maintain appropriate high-quality reserves and to report regularly on their holdings and operations.
Following the law’s approval in mid-2025, the combined market capitalization of stablecoins climbed to roughly $300 billion, marking growth of nearly 47% over a relatively short period. The segment is now seen as one of the main bridges between traditional finance and crypto markets.
Analysts project that the stablecoin market could exceed $1.5 trillion by 2030, driven by use in payments, trading, on-chain liquidity and emerging real-world asset platforms. In parallel, the tokenization of real-world assets (RWA) – from bonds and funds to real estate and collectibles – is expected to expand rapidly as more value migrates onto ledgers.
BNY Mellon’s work on reserves funds, participation in tokenization pilots and launch of its own deposit tokens position the bank at several junctions of this evolving landscape. For regulators, having large incumbents involved can make it easier to apply existing rules and oversight rather than starting from scratch.
At the same time, supervisors such as the SEC and CFTC have emphasized that 24/7 on-chain markets may be more suitable for some asset classes than others. They have cautioned that a blanket, one-size-fits-all approach to always-open markets may not be workable across the full spectrum of securities and derivatives.
BNY Mellon’s wider digital asset strategy
The launch of tokenized deposits does not come out of nowhere. Over the past several years, BNY Mellon has participated in multiple pilots and consortia focused on digital assets and tokenization, both in the U.S. and internationally.
One example is the bank’s involvement in Project Guardian in Singapore, an initiative led by the Monetary Authority of Singapore that tests how tokenized deposits and other instruments can interoperate across different platforms. BNY Mellon joined pilots exploring cross-chain settlement and collaboration between banks on shared digital infrastructure.
The bank has also invested in its in-house blockchain capabilities, building and operating the permissioned ledger now used for tokenized deposits. This approach gives BNY tighter control over performance, privacy and compliance than it would have on an open public blockchain.
Reports over recent years have highlighted how large, long-established institutions such as BNY Mellon, JPMorgan and Citigroup are retooling legacy systems to support tokenized instruments. Projects range from tokenized repo transactions and intraday liquidity tools to blockchain-based collateral management.
For BNY Mellon, the tokenized deposits platform is presented as a natural extension of its role as a global custodian and cash manager. The bank is effectively taking functions it already performs – safekeeping, settlement, liquidity – and delivering them through new technological channels.
Wall Street’s broader shift toward blockchain-based infrastructure
BNY Mellon is far from alone in experimenting with blockchain in wholesale markets. JPMorgan, for instance, has been piloting and deploying blockchain-based settlement solutions for several years, including the launch of a deposit-like token on a public Layer 2 network.
In Europe, a group of banks is collaborating on a euro-denominated stablecoin intended to comply with the EU’s MiCA regulatory regime. These efforts, along with tokenized government bonds, repos and funds, illustrate how major financial centers are testing different flavors of digital cash and tokenized assets.
Analysts cited in various industry reports argue that tokenization and blockchain-based settlement could lower operating costs by 20-30% over time, mainly by reducing intermediaries, manual reconciliation and delays in clearing and settlement.
BNY Mellon’s entrance into the tokenized deposit space adds another large incumbent to the list of institutions turning blockchain from a theoretical experiment into part of their day-to-day infrastructure. This does not mean that everything will move on-chain overnight, but it does suggest that hybrid models combining legacy and digital rails are likely to become more common.
As more banks and market operators participate, network effects could gradually emerge: shared standards for token formats, settlement processes and regulatory reporting may make it easier to plug different platforms together in a coherent way.
Against this backdrop, BNY Mellon’s tokenized deposits can be seen as one building block in a larger transition toward programmable, always-on money within regulated finance. The bank is offering institutions a familiar entry point – tokenized versions of the deposits they already understand – while laying groundwork for more complex applications as the ecosystem matures.
All told, the initiative captures a moment where traditional custodians, trading firms and digital asset specialists are converging around shared infrastructure. Whether through tokenized deposits, stablecoins or other instruments, the direction of travel points toward more fluid, software-driven money that can move at the pace of global markets while remaining anchored in established regulatory frameworks.
