Bank of New York Mellon (BK), the world’s largest deposit-taking bank with $55.8 trillion in assets under custody, is testing tokenized deposits in an effort to modernize its global payments infrastructure and keep pace with the growing shift toward blockchain-based finance.
This effort, still in an exploratory phase, aims to allow customers to make payments using tokenized versions of their deposits, Bloomberg reports.
These tokenized deposits would move across a blockchain, enabling near-instant settlement and potentially reducing transaction costs. BNY currently handles approximately $2.5 trillion in payments every day.
BNY’s Carl Slabicki told Bloomberg that the technology could help banks “overcome legacy constraints,” allowing them to move money more quickly within their own networks and, eventually, the broader financial system.
BNY Mellon joins a growing list of major banks experimenting with tokenized funds. JPMorgan began testing its JPMD token in June on Coinbase’s Base blockchain, while in Europe nine banks are building a MiCA-compliant euro stablecoin.
Over the summer, BNY Mellon and Goldman Sachs partnered to deploy tokenized money market funds for their clients. The financial institution’s CEO, Robin Vince, has said in the past that the bank would not be as aggressive as other lenders in trying to obtain crypto deposits.
