Bank of New York Mellon launches tokenized deposits! Wall Street competition is fierce, with upgrades to settlement infrastructure competing fiercely

Bank of New York Mellon officially launches tokenized deposit services, combining regulated banking systems with blockchain technology to bring a pivotal shift in institutional liquidity flow and settlement efficiency.

The world’s largest custodian bank ventures onto the chain, officially launching tokenized deposit services

The largest custodian bank globally, Bank of New York Mellon (BNY Mellon), announced last Friday (1/9) the official rollout of its tokenized deposit services for institutional clients. This initiative transforms a technology previously in the exploratory stage into a practical financial tool, allowing this financial giant with over 240 years of history to extend its services into the digital industry.

As of September 2025, BNY Mellon holds assets worth up to $57.8 trillion in custody for clients and manages approximately $2.1 trillion in assets, with the Treasury Department processing about $2.5 trillion in transactions daily. The newly launched tokenized deposits are primarily created on a private, permissioned blockchain within the bank, representing digital equivalents of customer deposits.

BNY Mellon emphasizes that tokenized deposits are significantly different from typical stablecoins; they are direct, interest-bearing liabilities issued by the bank, meaning that customer value is directly linked to a regulated banking system, not outside the banking system.

The core design of this service currently revolves around “digital ledger entries,” which mirror the actual balances of customers within the bank, ensuring assets remain secure within the regulated system while enabling near-instant value movement on the blockchain to meet margin requirements or facilitate collateral transfers between institutions. BNY Mellon’s digital asset platform not only supports tokenized deposits but also serves as the “consolidator” of its digital infrastructure, integrating services like the tokenized money market fund launched last July in partnership with Goldman Sachs.

Wall Street giants gather to build programmable financial ecosystems

The launch of this innovative service has attracted participation from numerous financial authorities and digital asset-native companies. The initial list of clients and partners is quite prestigious, including Intercontinental Exchange (ICE), Citadel Securities, DRW Holdings, Ripple’s institutional brokerage platform Ripple Prime, asset management firm Baillie Gifford, and stablecoin issuer Circle Internet Group.

• Elizabeth King, Head of Global Clearing at ICE, confirmed that the group’s clearinghouse will support this tokenized deposit service around the clock, aiming to prepare for a 24/7 trading environment.
• ICE CEO Jeffrey Sprecher stated that through continuous collateral management, tokenization technology could further boost market trading volumes.
• Carolyn Weinberg, Chief Product and Innovation Officer at BNY Mellon, said the core of this project is connecting traditional banking infrastructure with emerging digital rails and digital ecosystem participants in a trusted manner. This linkage will reduce settlement friction and improve liquidity efficiency.
• Nathan McCauley, CEO of digital asset custodian Anchorage Digital, also pointed out that tokenized deposits will bring institutional finance closer to a “programmable future,” enabling funds to flow within the trust frameworks required by enterprises with the desired precision and speed.
• Baillie Gifford investment manager Theo Golden believes that the tokenization of cash is a key driver of broader asset tokenization, marking a turning point in market infrastructure and demonstrating how regulated institutions can bring tokenized funds into the core of the financial system to achieve institutional-level interoperability and efficiency.

Regulatory clarity, the “GENIUS Act” as a catalyst for bank digital transformation

BNY Mellon’s rapid progress is closely related to improvements in the US regulatory environment. The recently passed “GENIUS Act” sets a regulatory framework for stablecoins and clarifies the handling of digital dollars behind the US dollar. Although tokenized deposits are internal to the banking system and not classified as stablecoins, most banks see this legislation as providing the necessary legal certainty for building blockchain-based payment and settlement infrastructure.

BNY Mellon CEO Robin Vince publicly stated that digital assets and tokenization are a “megatrend” that banks must participate in, noting that regulation was once a barrier but is now gradually becoming a driver for industry advancement.

In terms of technical implementation, tokenized deposits introduce “programmable transactions,” meaning transactions can be automatically executed based on preset conditions—for example, releasing collateral immediately after loan repayment—significantly reducing cumbersome administrative procedures. This automation, combined with 24/7 operations, addresses the urgent needs of modern, volatile markets for intraday liquidity and precise settlement timing. BNY Mellon’s strategy is clear: modernize global large-scale value transfer by balancing traditional banking security with the efficiency of distributed ledger technology (DLT).

The era of 24/7 operations arrives, and banks race to upgrade settlement infrastructure

With BNY Mellon’s entry, competition among major Wall Street banks in the tokenization industry is intensifying.

• JPMorgan Chase & Co. launched JPM Coin in 2020 and recently announced it will directly issue its deposit tokens on the privacy-focused Canton Network.
• HSBC plans to expand its tokenized deposit services to corporate clients in the US and the United Arab Emirates last year’s first half.
• Barclays is exploring tokenized funds by investing in stablecoin startup Ubyx.

These moves show that the banking industry is not aiming to replace currency but to upgrade the underlying rails for moving money.

This wave of digitization is also supported by regulators. In September 2025, the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) issued a joint statement proposing a shift of capital markets toward 24/7 operation modes to better align with the global around-the-clock economy.

Further reading
JPMorgan JPM Coin to land on Canton Chain! Complete issuance and redemption by year-end, enabling real-time clearing
Barclays invests in Ubyx! Collaborating with US startup to explore compliant stablecoins and tokenized deposits
SEC and CFTC team up! Promoting 24-hour trading to connect crypto, gold, and forex markets

The current legacy financial system relies on complex intermediary networks and cannot operate on weekends and holidays, potentially forcing investors into rigid positions when markets are closed. Blockchain technology and real-world asset (RWA) tokenization are key tools to realize this vision, reducing intermediaries, shortening settlement times, and lowering cross-border transaction costs. BNY Mellon’s tokenized deposit service, against this backdrop, becomes an important bridge connecting the old system with the future of programmable finance.