BNY Mellon has started exploring tokenized deposits, joining other global banks in their pursuit to increase the use of blockchain to transfer funds.
The financial institution is looking into tokenized deposits to migrate a part of its USD 2.5 trillion daily payment flow onto blockchain. The decision comes during a broader push to improve cross-border settlement systems and allow real-time, 24/7 transactions. Additionally, BNY Mellon’s move falls in line with similar digital projects from other financial institutions worldwide.
Modernising payments through tokenized deposits
BNY Mellon has been working on improving its payment infrastructure by exploring tokenized deposits, with the financial institution intending to scale speed, transparency, and efficiency across real-time and international payment systems by transferring a share of its daily payment volume to blockchain rails. Leveraging tokenized deposits is set to enable the bank to sidestep legacy systems and operate continuously without encountering any daily halts.
These tokenized deposits are backed 1:1 by commercial bank money, representing direct claims on balances. Compared to stablecoins, these deposits remain within regulated banking ecosystems and hold minimal risks. By integrating blockchain, BNY Mellon is set to be able to keep uninterrupted transaction flows and further improve its client services.
Furthermore, BNY Mellon’s tokenized deposits plan comes as an addition to the financial institution’s broader digital asset strategy that also extends to custody and tokenization services. Back in July 2025, BNY Mellon started working with Goldman Sachs to roll out a tokenized money market fund solution. As part of the collaborative initiative, the bank was set to employ blockchain technology developed by Goldman Sachs to keep a record of customers’ ownership of select Money Market Funds (MMFs). Through this, the two financial institutions sought to further improve the utility and transferability of existing MMF shares. At that time, BlackRock, BNY Investments Dreyfus, Federated Hermes, Fidelity Investments, and Goldman Sachs Asset Management were set to participate in the initial launch of the solution.
