Bank of New York Mellon has entered the tokenized deposits race.
The bank, which holds $57.8 trillion in assets under custody, announced Friday that clients can now transfer deposits using blockchain rails. These on-chain deposits work for collateral, margin transactions, and payments, with BNY targeting 24/7 operations.
The first users include Intercontinental Exchange (which owns the New York Stock Exchange), Citadel Securities, DRW Holdings, Ripple Prime, asset manager Baillie Gifford, and stablecoin firm Circle.
“This is very much about connecting traditional banking infrastructure and traditional banking institutions with emerging digital rails and digital ecosystem participants in a way that institutions trust,” said Carolyn Weinberg, BNY’s chief product and innovation officer.
Tokenized deposits differ from stablecoins in one key way. Stablecoins are backed by reserves like cash or short-term government debt. Tokenized deposits sit within the banking system itself and can pay interest.
This launch follows the passage of the GENIUS Act, which sets up stablecoin rules in the US.
Blockchain-based deposits could play a key role in tokenized securities, acting as the settlement layer for assets like stocks and bonds.
ICE plans to support tokenized deposits across its clearinghouses as it prepares for continuous trading. CEO Jeffrey Sprecher has previously said tokenization could help increase trading volumes by enabling round-the-clock collateral management.
BNY also pointed to programmable transactions, which allow transfers to execute automatically when certain conditions are met, such as releasing collateral once a loan obligation is fulfilled.
BNY joins a growing list. JPMorgan rolled out JPM Coin to institutional clients in November. HSBC plans to expand its tokenized deposit service to the US and UAE in the first half of this year.
In the UK, Barclays recently invested in Ubyx, a US startup building clearing systems for tokenized deposits. UBS, PostFinance, and Sygnum Bank have run Ethereum-based tests, while Swift is building on-chain settlement infrastructure.
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