Tokenized deposits to support blockchain payments drive BNY Mellon’s digital shift

Key Points:

• BNY Mellon explores tokenized deposits for blockchain payments.

• The move aligns with the rise of real-time, cross-border transactions.

• Global banks like JPMorgan and HSBC are testing similar systems.

• Blockchain promises faster, always-on settlement for institutional finance.

Tokenized deposits to support blockchain payments are gaining ground at BNY Mellon, the world’s largest custodian bank.

The institution is testing how digital deposits, built on blockchain, could improve the way clients send and receive money worldwide. This effort signals a major shift toward instant and 24/7 financial services.

Carl Slabicki, executive platform owner for Treasury Services at BNY Mellon, explained that the move is part of the bank’s broader modernization. He emphasized that clients are demanding faster, cheaper, and more secure payment rails. By using blockchain for tokenized deposits, BNY Mellon aims to meet those expectations while improving transparency and reducing costs.

Why banks are turning to tokenized deposits

Tokenized deposits represent claims on commercial bank money, converted into digital coins. They are fully backed by bank reserves and operate within the existing regulatory framework. Unlike stablecoins or cryptocurrencies, tokenized deposits come from licensed banks and are directly tied to real-world money.

BNY Mellon’s daily treasury services handle about $2.5 trillion in payments and oversee $55.8 trillion in assets under custody and administration. Shifting even part of this activity to blockchain could change how global banking operates. Transactions would no longer depend on traditional correspondent networks that close during weekends or holidays. Instead, settlement could occur almost instantly, at any time of day.

From my perspective, this shift is not only about speed but also about trust. When trusted institutions like BNY Mellon introduce tokenized systems, they bridge the gap between conventional finance and blockchain technology.

ANOTHER MUST-WATCH ON ICN.LIVE:

Global momentum for blockchain payments

Other major banks are taking similar steps. JPMorgan recently tested a USD deposit token called JPMD on Base, a blockchain linked to Coinbase. HSBC launched its own service to help corporate clients settle cross-border currency transactions using tokenized deposits. Even Swift, the messaging network that connects thousands of banks, is building a shared blockchain ledger for real-time transactions.

This growing trend shows that blockchain is no longer viewed as a niche technology for crypto enthusiasts. It’s becoming part of the global financial system’s foundation. The goal is clear — faster settlement, better liquidity management, and improved transparency across borders.

Tokenized deposits to support blockchain payments mark a turning point

For decades, banks have relied on systems like SWIFT and ACH to move money. These systems were designed for a slower, paper-based world. In contrast, blockchain-based tokenized deposits promise to move assets instantly while maintaining compliance and auditability.

BNY Mellon’s decision to explore these tools signals confidence in blockchain’s maturity. The bank’s move may influence peers and regulators to accelerate the adoption of similar infrastructure. Real-time settlement also means fewer intermediaries, reducing costs for clients and freeing up capital that would otherwise remain locked during long settlement cycles.

ANOTHER MUST-READ ON ICN.LIVE:

DeFi revenue growth accelerates as Uniswap and Aave lead with stronger token frameworks

Cross-border payments and tokenization

Cross-border payments have long been slow and costly, involving multiple intermediaries. Blockchain simplifies this process by creating a shared ledger accessible to all participants. With tokenized deposits, transactions can occur directly between verified institutions, improving efficiency and transparency.

This aligns with the broader push in finance toward on-chain settlement. As tokenization spreads, more assets — from money to securities — can move across the same digital rails. The result is a unified payment ecosystem where traditional and digital assets coexist securely.

What’s next for digital assets in banking

As banks adopt tokenized deposits, regulators will face new questions about oversight, cybersecurity, and consumer protection. Still, the advantages are hard to ignore. Instant settlement, full traceability, and round-the-clock operations represent significant progress.

BNY Mellon’s experiment may also pave the way for tokenized versions of other financial instruments, such as bonds or money market funds. For large institutions managing trillions in assets, blockchain could reduce operational friction and improve liquidity management.

Tokenization, as I see it, is more than a technology shift. It’s a modernization of the global financial backbone — one transaction at a time.

BNY Mellon’s exploration of tokenized deposits shows that traditional banks can lead the digital asset transformation responsibly. As blockchain adoption grows, clients will gain access to faster, safer, and more efficient payment options across borders.