The US bank introduced a tokenized deposit offering as part of its digital assets expansion.
Bank of New York Mellon has launched a tokenized deposit service aimed at institutional clients, expanding its activities in digital assets infrastructure, according to Bloomberg. The initiative allows eligible clients to represent traditional bank deposits in tokenized form on blockchain-based systems.
The new service enables institutional customers to hold and transfer tokenized representations of cash deposits while maintaining a direct claim on BNY Mellon as the deposit-taking institution. Unlike stablecoins, which are typically issued by non-bank entities and backed by reserves, tokenized deposits remain on a bank’s balance sheet and are subject to existing banking regulations.
Bloomberg reported that the product is designed for use cases such as on-chain settlement, internal liquidity management, and integration with tokenized securities and other blockchain-based financial instruments. The service is initially targeted at large financial institutions and corporate clients operating within regulated environments, rather than retail users.
BNY Mellon has been steadily expanding its digital asset capabilities in recent years. The bank already provides crypto custody services for select clients and has invested in blockchain-based settlement and tokenization initiatives. The launch of tokenized deposits builds on this strategy by linking traditional deposit infrastructure with distributed ledger technology, without introducing a new private currency.
Details regarding the underlying blockchain, transaction limits, and geographic availability were not fully disclosed at launch. Bloomberg noted that the service operates within existing regulatory frameworks and is subject to standard compliance requirements, including know-your-customer and anti-money-laundering controls. The bank did not announce immediate plans to make the product interoperable with public blockchains.
Tokenized deposits have gained attention among global banks as regulators assess the role of stablecoins and central bank digital currencies. Several institutions are exploring tokenized bank money as a way to achieve faster settlement and programmability while preserving regulatory oversight and deposit protection structures.
The launch comes as financial institutions increasingly test blockchain-based infrastructure for wholesale payments and securities settlement, particularly in environments where finality and counterparty risk management are critical.
Why This Matters
Tokenized deposits represent an incremental shift in financial market infrastructure rather than a new form of crypto asset. From a structural perspective, they expand regulated on-chain liquidity options for institutions, potentially reducing settlement friction while keeping funds within the traditional banking system.
Source
Bloomberg