$55.8T Custodian BNY Launches Tokenized Deposits on Blockchain

Bank of New york (BNY), the world’s largest custodian bank with $55.8 trillion in assets under custody, has launched tokenized deposits on its private blockchain platform. The move marks a significant step in bringing traditional banking infrastructure onto digital rails.

Bank of New York Mellon (BNY) has launched a tokenized deposit service, enabling clients to transfer bank deposits on blockchain rails. The on-chain deposits can be used for payments, collateral, and margin transactions, supporting faster settlement as it expands its digital…

— Wu Blockchain (@WuBlockchain) January 9, 2026

The global financial services company unveiled the capability through its Digital Assets platform. Client deposit balances now have on-chain mirrored representations. Early participants include prominent financial institutions and digital-native firms.

BNY’s treasury services division processes approximately $2.5 trillion in payments daily. The tokenized deposit initiative aims to support programmable, on-chain cash for institutional market infrastructure. The launch focuses initially on collateral and margin workflow use cases.

Carolyn Weinberg, Chief Product and Innovation Officer at BNY, addressed the development directly.

Tokenized deposits provide us with the opportunity to extend our trusted bank deposits onto digital rails

she stated.

How BNY’s Tokenized System Operates

The capability creates on-chain digital book entries representing participating clients’ existing demand deposit claims against the bank. These digital representations operate on BNY’s private, permissioned blockchain infrastructure.

Client balances continue to be recorded on BNY’s traditional systems. This maintains regulatory and reporting integrity while enabling blockchain-based functionality. The system operates under the company’s established risk, compliance, and control frameworks.

Tokenized deposits function as digital representations of client cash held at the commercial bank. By operating on blockchain rails, these deposits can transfer instantly. Transactions settle in real time without delays or intermediaries found in traditional payment systems.

In the future, BNY aims to support rules-based, near real-time cash movements. The goal is reducing settlement friction and enhancing liquidity for institutional clients.

Also, a roster of major financial institutions and crypto firms are participating as early adopters. Citadel Securities called tokenization “a critical part of the next wave of innovation in financial markets.”

ICE’s Global Head of Clearing, Elizabeth King, confirmed the exchange operator is taking steps toward supporting tokenized deposits across ICE’s clearinghouses. The collaboration prepares clearing infrastructure for 24/7 trading and tokenized collateral integration.

Nathan McCauley, CEO of Anchorage Digital, called the launch “a milestone moment for digital cash adoption.” Galaxy’s Steve Kurz described it as “a pragmatic step toward always-on markets.”

Meanwhile, Circle’s Dante Disparte welcomed BNY’s support of an always-on financial system. He emphasized interoperability between traditional and digital systems builds durable bridges to the broader internet financial system.

Baillie Gifford’s Tokenization Lead, Theo Golden, provided perspective on market evolution. “The technology has now passed a clear credibility threshold,” he stated. “The tokenization of cash is a critical enabler of broader asset tokenization.”

Competitive Landscape Takes Shape

BNY’s launch arrives amid growing blockchain adoption among major financial institutions. JPMorgan Chase launched a pilot of its blockchain-based deposit token, JPMD, in June 2025. That token represents U.S. dollar deposits held at the bank.

J.P. Morgan is bringing banking onchain.

Kinexys by @jpmorgan is launching JPMD, a USD deposit token for institutional clients, on Base.

It will be the first token of its kind on a public blockchain, enabling fast, secure, 24/7 money movement between trusted parties.

— Base (@base) June 17, 2025

Securitize CEO Carlos Domingo praised BNY’s consistent progress from experimentation to execution.

While many are still debating whether and how to engage, BNY is already building interoperable, regulated systems

he noted.

Ripple Prime’s President, Noel Kimmel, highlighted the broader industry shift. “More traditional financial institutions move into digital-native services in 2026,” she observed. Ripple is participating as an early adopter for cashflow management and liquidity optimization.

WisdomTree’s Will Peck framed tokenized deposits as foundational infrastructure. “Representing bank money on-chain opens opportunities for more programmable financial services,” he stated.

BNY continues connecting traditional banking infrastructure with emerging digital rails. The bank is integrating stablecoins, tokenized money market funds, and tokenized deposits. Tokenized deposits will serve as connective tissue across BNY’s digital infrastructure.