BNY Mellon Explores Tokenized Deposits to Enable 24/7 Instant Fund Transfers

Highlights:

• BNY Mellon is piloting tokenized deposits to enable instant fund transfers and faster payments.
• The bank has partnered with Goldman Sachs to maintain tokenized money market fund records.
• Global banks like JPMorgan and HSBC are also exploring tokenized deposits to improve cross-border payments.

BNY Mellon, the world’s largest custodian bank, is piloting tokenized deposits to allow clients to transfer funds instantly at any time. Carl Slabicki, executive platform owner for Treasury Services, said the effort aims to modernize real-time and cross-border payments.

The bank plans to move part of its $2.5 trillion daily payment flow onto blockchain rails. Tokenized deposits are digital coins backed one-to-one by commercial bank money, giving clients direct claims on balances. Unlike stablecoins, they do not rely on third-party reserves or securities.

JUST IN: 🇺🇸 BNY Mellon, the world’s largest custodian bank, explores allowing tokenised deposits and blockchain payments – Bloomberg. pic.twitter.com/BZgAddhktT

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This system could help banks overcome legacy technology limits and accelerate payments within their networks. Tokenized deposits enable prompt settlements and eliminate reliance on conventional correspondent banking models. BNY manages $55.8 trillion in assets under custody and administration, which provides it with a broad range to test these innovations.

The bank stated that tokenized deposits would first work within its infrastructure before it extends them to other banks. BNY will enhance efficiency and provide continuous payments through cash digitization compared to traditional banking systems.

Strategic Partnerships Drive Tokenized Fund Initiatives

BNY Mellon collaborated with Goldman Sachs to keep tokenized ownership records of money market funds. The partnership allows institutional clients to access real-time clearance and uninterrupted market availability. This initiative also includes other major institutions such as BlackRock, Fidelity, and Federated Hermes. Tokenized money market funds complement the deposit tokens, forming a more integrated onchain framework.

Goldman Sachs registers the fund owner on its blockchain hosted on its own servers. The strategy enhances collateral mobility and minimizes settlement delays. By tokenizing deposits and funds, BNY Mellon moves one step closer to a fully digital payment ecosystem. This project demonstrates the effort of the bank to modernize treasury services and cross-border transactions. It is also an indicator of the willingness to expand the use of blockchain standards in the market.

BNY Mellon Explores Tokenized Deposits Amid Industry Shift

The work of BNY Mellon follows other international banks experimenting with tokenized deposits. JPMorgan released its USD deposit token, JPMD, earlier in the year. Recently, HSBC introduced a tokenized deposit service to corporate customers to make cross-border transfers. SBI Shinsei Bank collaborated with Partior in Singapore and DeCurret DCP in Japan to test multicurrency tokenized deposits.

Tokenization is poised for significant growth, driven by institutional adoption and maturing blockchain infrastructure. HSBC's involvement in tokenized assets highlights the shift towards enhanced liquidity and settlement efficiency. #RealWorldAssets #Tokenization #Blockchain…

— RWA Alert (@AboutRWAs) October 1, 2025

SWIFT has also created a prototype of a shared ledger in such a way that it allows real-time international payments through blockchain. These efforts imply that token deposits are becoming more popular amongst financial players. Banks are also prioritizing efficiency, transparency, and constant availability, coupled with minimizing delays in transactions. Analysts believe tokenized deposits can one day be seamlessly integrated into the current banking networks to enhance liquidity and speed of settlement.

The broader use of token deposits has the potential to reshape the banking industry in its approach to major transactions and 24/7 financial markets. The trend also indicates the increasing role of blockchain in mainstream finance.