BNY Mellon Launches Tokenized Deposits on Blockchain

Highlights:

• BNY plans digital client deposits on its blockchain while keeping normal withdrawals.
• Digital deposits aim to support payments, collateral, and margin using a permissioned blockchain.
• Banks and crypto firms collaborate to speed adoption of tokenized deposit systems.

BNY, the world’s largest custodian bank, shared new plans on Friday. It said digital versions of client deposits will run on its own blockchain. These digital records will link with normal bank systems. So, clients can still withdraw money in the usual ways.

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BNY Starts Using Digital Cash on Blockchain

In a blog post, the bank said this is a big step toward on-chain, programmable cash. The goal is to support payments on digital networks. For this, BNY will use a private and permissioned blockchain. Access will be granted to large institutions and digital-native firms. Client funds will appear as digital book entries. Initially, the system will focus on collateral and margin requirements. However, compliance records will stay in BNY’s regular systems. Even so, balances will still show on the chain to help with daily operations.

Bank of New York Mellon (BNY) has launched a tokenized deposit service, enabling clients to transfer bank deposits on blockchain rails. The on-chain deposits can be used for payments, collateral, and margin transactions, supporting faster settlement as it expands its digital…

— Wu Blockchain (@WuBlockchain) January 9, 2026

The plan shows growing interest from big banks in digital asset services linked to normal finance. BNY said this can reduce delays in settlement. It can also improve liquidity flow. This matters when fast transfers are needed for risk control and quick trades.

Carolyn Weinberg, the Chief Product and Innovation Officer, spoke about trust in bank deposits. BNY has worked for more than 240 years. By September, client assets under safeguard reached $57.8 trillion. At the same time, assets under management were $2.1 trillion. A digital assets unit started in 2021. Then, in the next year, the bank began private key management for clients. It also started custody services for Bitcoin and Ethereum. These steps show a steady shift toward wider digital support in banking services.

Other banks already offer similar deposit products on more than one network. BNY said its deposit tokens will act as a link across its digital systems. These tokens will also connect with a tokenized money market fund made with Goldman Sachs. The fund was shared in July.

BNY Gains Support from Crypto Firms for Tokenized Deposits

The blog post also shared views from crypto-focused firms. These included Anchorage Digital, Circle, Paxos, Securitize, backed by BlackRock, and Ripple Prime, an institutional brokerage linked to Ripple services. Nathan McCauley, co-founder and CEO of Anchorage Digital, called this a key moment for digital cash use. He said tokenized deposits can help speed up adoption. Support from these firms shows closer ties between banks and crypto platforms.

Scale remains a key plank for BNY. The bank protects $57.8 trillion of customer assets, which includes pensions, funds, and large institutions. Any digital offerings will, therefore, be subject to stringent compliance and custody requirements. These digital entries will not be bank accounts but reflect various funds already kept with BNY. Clients will retain the same right of withdrawal.

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