BNY Mellon has launched a tokenized deposit service, the bank confirmed on January 9. The offering creates an on‑chain representation of client deposits to speed transfers, support collateral and margin movements, and push toward 24/7 settlement, according to the firm.
The move is part of a broader digital‑asset strategy that includes a stablecoin reserves money‑market fund, tokenized credit products and expanded custody and data capabilities — positioning the custodian to link legacy finance and blockchain rails for institutional clients.
BNY Mellon’s tokenized deposits allow clients to move bank deposits over blockchain rails, enabling programmable and near‑real‑time settlement across ecosystems. The bank framed the capability as a tool to reduce counterparty risk and streamline collateral flows for margining and financing operations.
Operational benefits flagged by the institution include faster payment finality, around‑the‑clock availability and lower friction versus legacy batch settlement systems. Those outcomes target treasury teams and trading desks that need predictable intraday liquidity and immediate access to collateral.
Practical caveats remain. Tokenized deposits still depend on integration with custodial controls and legal frameworks that govern bank funds; these elements determine counterparty exposure and insolvency treatment for on‑chain balances.
As one succinct description in coverage put it, ‘The effort aims to enable near instant settlement and potentially reduce transaction costs,’ attributed to reporting on the bank’s trials.
Context: this launch inside BNY Mellon’s digital‑asset push
The deposit tokenization sits alongside several prior initiatives that together signal a strategic pivot into on‑chain services.
The bank also highlights SEC approval for ETF crypto custody services and an integrated digital‑asset platform offering custody, financing and data. With roughly $55.8T in assets under custody, BNY Mellon frames these capabilities as infrastructure upgrades rather than speculative plays.
For traders and corporate treasuries, the practical implications are straightforward: tokenized deposits can shorten settlement windows, free intraday liquidity, and simplify the use of cash as collateral across on‑chain and off‑chain venues. That potential depends on adoption by counterparties and the operational resilience of the supporting rails.
Investors and market participants will now watch adoption metrics and integration work with custody, stablecoin reserve management and tokenized credit products. Uptake by large asset managers and treasury operations will determine whether tokenized deposits lower costs and operational risk or primarily reallocate existing frictions within a new technical wrapper.
