BNY Mellon Explores Tokenized Deposits to Enable Blockchain-Based Payments

The Bank of New York Mellon (BNY), the world’s largest custodian bank by assets under custody, is reportedly exploring the use of tokenized deposits to enable faster and more efficient blockchain-based payments.

The move signals the bank’s growing commitment to on-chain settlement as financial institutions modernize global payment infrastructure.

According to Carl Slabicki, executive platform owner for Treasury Services at BNY, the initiative is part of a broader digital modernization strategy aimed at improving real-time and cross-border transaction capabilities. Speaking with Bloomberg, Slabicki described the effort as a natural step toward achieving instant and interoperable payment systems that operate seamlessly across jurisdictions.

Moving Traditional Banking Onto Blockchain Rails

Tokenized deposits function as bank-issued digital coins, each representing a claim on commercial bank money. Unlike stablecoins or central bank digital currencies, these tokens are fully backed by regulated financial institutions, ensuring compliance with existing banking frameworks.

BNY’s treasury services division already processes roughly $2.5 trillion in daily payments and manages about $55.8 trillion in assets under custody and administration. By moving a portion of these transactions onto decentralized ledgers, the bank aims to facilitate instant settlements, reduce counterparty risk, and operate around the clock, a major contrast to the limited hours and slower settlement times of traditional banking networks.

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Bridging Legacy Finance and Web3

The bank’s exploration of tokenized deposits comes amid a broader wave of institutional blockchain adoption. Major financial players, including JPMorgan and Citi, have launched similar projects to tokenize deposits and securities. For BNY, the move could help bridge its long-standing institutional client base with emerging on-chain financial ecosystems, reinforcing its role as a digital asset custodian and payment innovator.

If successful, the initiative would place BNY at the forefront of the transition from legacy correspondent banking to blockchain-driven financial infrastructure, paving the way for a new era of near-instant global settlement.

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