BNY Mellon Explores Tokenized Deposits for Blockchain Payments

BNY Mellon, the $55.8 trillion custodian bank, is advancing its exploration of tokenized deposits to facilitate blockchain-based payments. The initiative aims to modernize infrastructure, enabling real-time, instant, and cross-border transactions. The bank processes approximately $2.5 trillion in daily payments, positioning this effort as a strategic MOVE to enhance efficiency.

Tokenized deposits function as digital coins representing deposit claims against commercial banks. These tokens mirror traditional deposits but leverage blockchain rails for instantaneous settlement. Carl Slabicki, BNY Mellon's Treasury Services executive platform owner, emphasized the potential to overcome legacy technology constraints, enabling seamless movement of deposits and payments within ecosystems and, eventually, across broader markets.

The project aligns with BNY Mellon's broader push to integrate blockchain technology into payment systems, particularly for cross-border transactions. This development coincides with increasing experimentation by major financial institutions in the digital asset space.