BNY Mellon Trials Tokenized Deposits to Modernize its Global Payment Infrastructure

TL;DR

• BNY Mellon is testing blockchain deposits to enable near-instant settlement and potentially reduce transaction costs.

• The bank joins JPMorgan and other leading institutions in experimenting with tokenized funds.

BNY Mellon Trials Blockchain Deposits

Bank of New York Mellon (BNY) is currently testing tokenized deposits as it looks to modernize its global payment infrastructure. Currently in the exploratory phase, the experiment seeks to allow clients to make payments using tokenized versions of their deposits.

In its report, Bloomberg revealed that the tokenized deposits would enable near-instant settlement and potentially reduce transaction costs. The bank currently processes over $2.5 trillion in daily payments. 

BNY's Carl Slabicki told Bloomberg that the tokenization of deposits could help financial institutions overcome legacy constraints, empowering them to move money faster within their own networks and eventually ensure faster interoperability across the broader financial system. 

This latest development means that BNY Mellon joins a host of major banks experimenting with tokenized funds. 

In June, JPMorgan began trialing its JPMD token on the Base blockchain. In Europe, nine banks are currently building a MiCA-compliant euro stablecoin.