BNY Mellon launches tokenized deposits for on-chain payments

BNY Mellon has rolled out a new tokenized deposit service that lets clients send money using blockchain rails instead of old banking pipes. The setup places real bank deposits on-chain while the cash stays inside client accounts.

The cash will reportedly mirror deposits clients already hold at BNY Mellon, not a separate token floating around. BNY said this structure allows funds to be used for margin calls and collateral without waiting for banking hours. The goal is simple. Payments clear faster. Collateral shifts without delay. Operations run closer to twenty-four-seven.

Banks link deposits to always-on crypto markets

Clients in the first wave include Intercontinental Exchange, Citadel Securities, DRW Holdings, Ripple Prime, Baillie Gifford, and Circle. The mix covers exchanges, trading firms, asset managers, and a major stablecoin issuer.

Each firm is testing how on-chain deposits work inside real market workflows. BNY Mellon said the service stays within the banking system and can pay interest, which separates it from stablecoins.

Blockchain money can also sit on the settlement side of tokenized stocks and bonds. Banks across the industry have pushed tokenization harder over the past year, mostly to speed up collateral handling. Carolyn Weinberg, chief product and innovation officer at BNY Mellon, said the focus is trust and connection.

“This is very much about connecting traditional banking infrastructure and traditional banking institutions with emerging digital rails and digital ecosystem participants in a way that institutions trust,” Carolyn said.

Other large banks are taking similar steps. JPMorgan Chase began rolling out its JPM Coin to institutional clients last November. HSBC plans to expand its tokenized deposit service to corporate clients in the United States and the United Arab Emirates in the first half of 2026. These efforts followed passage of the Genius Act in the United States, which sets rules for stablecoins. Tokenized deposits differ because they live inside banks and earn interest, while stablecoins are backed by cash or short-term government debt.

BNY Mellon sits among the world’s largest custodians, holding $57.8 trillion in assets under custody or administration. The bank has worked in digital assets for years. In July, it said it was working with Goldman Sachs to use blockchain records for money market fund ownership.

ICE, which owns the New York Stock Exchange, said it will work toward supporting tokenized deposits across its clearinghouses as it updates systems for nonstop trading. Elizabeth King, ICE’s global head of clearing and chief regulatory officer, said the infrastructure is being prepared for around-the-clock use. ICE chairman and chief executive Jeffrey Sprecher said on an earnings call in October that tokenization could lift trading volumes through constant collateral access.

A core feature of blockchain assets is programmable transactions. BNY Mellon said tokenized deposits can trigger actions automatically once conditions are met. That includes releasing collateral after a loan obligation is satisfied. The bank said this keeps cash inside regulated accounts while letting code handle timing.

The service places BNY Mellon at the center of a growing shift where banks wire traditional deposits into digital rails without stepping outside regulation. Clients now test how far those rails can run.

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