BNY Mellon Investigates Tokenized Deposits for $2.5 Trillion Daily Payment Network
BNY Mellon is looking into the implementation of tokenized deposits to enhance its vast daily payment systems and improve cross-border transactions.
BNY Mellon, the world’s leading custodian bank, is exploring the implementation of tokenized deposits to facilitate instant transfers, enabling clients to conduct transactions 24/7 while reducing limitations of traditional banking systems.
Carl Slabicki, the Executive Platform Owner at BNY for Treasury Services, shared with Bloomberg about the initiative aimed at modernizing real-time transfers and international payments, hoping to transition a fraction of its massive $2.5 trillion daily transaction volume onto blockchain technology.
According to Slabicki, “Tokenized deposits can aid banks in surpassing outdated technology limitations, simplifying the movement of deposits and transactions across their networks, and eventually facilitating broader market interactions as standards evolve.”
These tokens are digital assets equivalent one-to-one to commercial bank funds. In contrast to stablecoins, typically supported by securities or external reserves, tokenized deposits directly represent claims on commercial bank assets.
Cointelegraph reached out to BNY for further comments, but no response was received prior to publication.
Related:
Goldman Sachs and BNY to Launch Tokenized Money Market Funds
In July, Goldman Sachs and BNY disclosed plans to collaborate on providing institutional clients access to tokenized money market funds, aiming for real-time settlements and constant market access within traditional finance.
Ownership records of these funds will be stored on Goldman’s private blockchain, with involvement from prominent entities like BlackRock, Fidelity, and Federated Hermes.
Money market fund tokens. Source: Copper.co
BNY is also one of over 30 organizations collaborating with SWIFT to develop a shared blockchain-based ledger to enhance real-time international payments.
Global Banks Test Tokenized Deposits for Cross-Border Payments
The announcement from BNY comes alongside several similar ventures. JPMorgan kicked off its own tokenized deposit project, JPMD, in June, while HSBC introduced a cross-border tokenized deposit service for corporate clients last month.
Recently, SBI Shinsei Bank partnered with Singapore’s Partior and Japan’s DeCurret DCP to investigate multicurrency tokenized deposits for cross-border transactions, formalizing a partnership to create a blockchain framework for immediate currency clearing.
