BNY Launches Tokenized Bank Deposits, Major TradFi Push into Blockchain Technology
KEY FACTS:
BNY (formerly known as BNY Mellon) has officially launched tokenized bank deposits for institutional clients. This innovative offering creates an on-chain representation of existing client deposit balances held at the bank, issued on BNY's in-house permissioned private blockchain. The tokenized deposits enable faster, more efficient movements for collateral, margin requirements, and payments, delivering near real-time settlement, greater transparency, reduced friction, improved liquidity, and support for an "always-on" 24/7 global financial operating model, all while remaining fully regulated, interest-bearing, and backed directly by the bank's liabilities rather than third-party reserves. Early participants include major institutions such as Intercontinental Exchange (ICE), Citadel Securities, DRW Holdings, Ripple Prime, Circle, Anchorage Digital, WisdomTree, and Galaxy, with BNY's Chief Product and Innovation Officer Carolyn Weinberg emphasizing the service's role in extending trusted bank deposits onto digital rails for scalable, resilient, and compliant operations.
BNY
BNY Launches Tokenized Bank Deposits, Major TradFi Push into Blockchain Technology
BNY (formerly Bank of New York Mellon), the world's largest custodian bank has launched a tokenized deposit service for its institutional clients. The announcement, made on Friday, January 9, 2026, marks a milestone in the ongoing convergence of traditional finance (TradFi) and blockchain technology, as major banks increasingly adopt digital innovations to modernize legacy systems. BNY, which traces its roots back to 1784 and currently oversees approximately $57.8 trillion in assets under custody and administration, introduced the service through its in-house permissioned blockchain network. This private, controlled blockchain allows institutional clients to hold and transfer on-chain representations of their existing bank deposits, essentially digital mirrors of traditional cash balances held at the bank.
Tokenized bank deposits represent direct claims on commercial bank money, functioning as on-chain cash balances. Unlike public cryptocurrencies or many stablecoins (which are often backed by reserves of cash, government securities, or other assets held outside the issuing entity), these tokenized deposits remain fully within the regulated banking system. They can earn interest, carry the full backing and protections of BNY as a supervised institution, and avoid the risks associated with third-party reserves.
The primary initial use case for these tokenized deposits is to support collateral and margin requirements in institutional transactions. BNY highlighted that the service enables faster, more efficient asset movements with enhanced settlement certainty, greater transparency, reduced friction, and improved liquidity access. The bank emphasized that as global financial markets evolve toward an "always-on" operating model (running 24 hours a day, seven days a week) as institutions are demanding tools that eliminate the limitations of traditional banking hours, weekends, and holidays.
Carolyn Weinberg, BNY's Chief Product and Innovation Officer, stated in the announcement that tokenized deposits provide an opportunity to extend trusted bank deposits onto digital rails. This allows clients to operate with greater speed across collateral, margin, and payments, all within a framework designed for scale, resilience, and regulatory alignment. Over time, the bank plans to expand functionality, potentially including programmable payments and broader liquidity optimization.
The launch coincides with the rush by traditional financial institutions to embrace blockchain and real-world asset (RWA) tokenization. This trend has accelerated following regulatory developments in the United States, including the passage of the GENIUS Act, which established clearer rules for stablecoins and digital assets, providing banks with a more supportive environment for innovation.
In September 2025, the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) issued a joint statement advocating for expanded trading hours to better align U.S. markets with the global, always-on economy. The regulators noted that blockchain-enabled 24/7 markets and tokenization are particularly viable for certain asset classes, though they cautioned against a one-size-fits-all approach. Blockchain technology addresses longstanding inefficiencies in the legacy financial system, such as reliance on intermediaries, delayed settlements (often T+1 or T+2), and operational downtime.
BNY's move follows earlier exploration of the concept. Reports from October 2025 indicated the bank was testing tokenized deposits to modernize its massive $2.5 trillion daily payment flows and overcome constraints in legacy treasury systems. The full launch converts those efforts into a live service.
Early adopters include prominent institutional players such as Intercontinental Exchange (ICE) (owner of the New York Stock Exchange), Citadel Securities, DRW Holdings, Ripple Prime, Baillie Gifford, Circle Internet Group, Anchorage Digital, WisdomTree, and Zero Hash. These participants are testing the technology in real-world workflows, including collateral management, margin calls, and liquidity operations.
BNY's tokenized deposits represent more than a technical upgrade as they signal Wall Street's strategic embrace of blockchain to remain competitive in a digital-first era. As CEO Robin Vince has described tokenization as a "megatrend," the bank is positioning itself to bridge traditional infrastructure with emerging digital ecosystems while maintaining the trust, scale, and regulatory compliance that institutional clients demand.
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