Putting Deposits on Blockchain Rails: BNY Mellon Enables Instant Global Payments

BNY Mellon, the world's largest custodial bank with $55.8 trillion in assets under custody, is advancing its blockchain integration by testing tokenized deposits to modernize its global payment infrastructure. The initiative aims to enable near-instant settlement, reduce transaction costs, and overcome legacy system constraints by leveraging blockchain technology to move deposits on-chain. BNY processes approximately $2.5 trillion in daily payments, and the tokenized deposits could facilitate real-time, cross-border transactions across its network.

The project, led by Carl Slabicki, executive platform owner for Treasury Services at BNY Mellon, involves creating digital representations of traditional deposits. These tokenized deposits would function as programmable bank money, allowing clients to make payments via blockchain without the delays inherent in traditional systems. By operating on blockchain rails, the initiative seeks to achieve 24/7 availability and instant settlement, aligning with broader industry trends toward faster, more efficient financial infrastructure.

BNY Mellon's efforts align with similar initiatives by other major banks. JPMorgan recently launched its JPMD token on Coinbase's Base blockchain to represent dollar deposits, while HSBC introduced a tokenized deposit service for corporate clients. European banks, including UniCredit and ING, are also developing euro-backed stablecoins under the EU's MiCA framework. BNY Mellon's collaboration with Goldman Sachs to tokenize money market funds further underscores the shift toward blockchain-based settlement systems.

The bank's participation in SWIFT's blockchain-ledger project highlights its strategic focus on interoperability standards. These efforts aim to create a shared infrastructure for real-time cross-border payments, addressing the inefficiencies of legacy systems. BNY Mellon's CEO, Robin Vince, has emphasized a measured approach to crypto adoption, prioritizing infrastructure modernization over aggressive crypto deposit expansion.

The broader financial sector is witnessing rapid blockchain adoption, driven by regulatory clarity in the U.S. and EU. For instance, the U.S. is advancing stablecoin regulations, while the EU's MiCA framework provides a legal foundation for digital assets. Deutsche Bank and other institutions are exploring stablecoins and tokenized deposit networks to enhance payment efficiency.

Tokenization extends beyond payments, with banks tokenizing real-world assets (RWAs) such as bonds and private funds. The RWA market, valued at $17.4 billion, is projected to reach $30.1 trillion by 2034. BNY Mellon's initiatives position it at the forefront of this transformation, aligning with global efforts to leverage blockchain for financial innovation.