BNY's large custody box is transforming the industry by offering a blockchain-based deposit solution for corporate clients

As one of the oldest financial institutions in the world, BNY Mellon has reached a milestone this month. This major custodian, managing $58 trillion, has opened a new platform to enable institutional investors to directly transact their bank deposits on a blockchain network. This move is at the forefront of a broad transformation that is about to shake the foundations of the financial architecture.

Tokenized Deposits: Revolution in Payment Systems

The new platform operates by reflecting customer balances on a permissioned blockchain network. This solution is designed to provide speed and efficiency in collateral and margin transactions. Every deposit received is transformed into a digital representation on the chain, enabling real-time exchange.

Carolyn Weinberg, BNY’s Head of Product and Innovation, described this development as follows: “Moving our trusted bank deposits to a digital infrastructure offers an opportunity for clients to transact faster in collateral, margin, and payments.” The platform is structured within a comprehensive framework to keep risk under control and ensure regulatory compliance.

24/7 Blockchain Transactions: A New Era in Liquidity Management

Financial markets have traditionally operated within specific hours. BNY Mellon’s move opens the door for asset trading to occur seven days a week, twenty-four hours a day. This revolution in liquidity management provides institutional clients with an unprecedented advantage.

Last year, BNY conducted trials of this project. Now, with sufficient data and experience accumulated, full-scale operation has begun. The platform will operate on infrastructure fully controlled by BNY, and all transactions will be managed according to risk and compliance standards set by the bank.

Wall Street’s Innovative Step Creates Waves in the Sector

BNY is not the only institution taking this path. Sector-wide activity is observed. In June, JPMorgan launched a dollar deposit token called JPMD on Coinbase’s Base blockchain. In Europe, nine banks have joined forces to develop a euro stablecoin compliant with MiCA (Markets in Crypto-Assets Regulation) standards.

This move redefines the relationship between financial institutions and technology companies. The principles of decentralized technology are increasingly gaining acceptance in the West.

Blockchain for Institutional Transactions: Hidden Opportunities

BNY’s initiative holds enormous potential to reduce operational costs for treasury departments, hedge funds, and other institutional investors. Deposit tokens aim to eliminate the middleman layer in financial transactions, creating a more efficient market structure.

Tokenization is the beginning of the digital world stepping into real-world assets. Once considered only theoretically, this concept is now being seriously addressed by the most established institutions on Wall Street. The $58 trillion assets managed by this major custodian are the strongest indicator of how widespread blockchain-based transactions have become.