Tokenized deposits are digital bank-issued coins backed one-to-one by commercial bank balances; BNY Mellon is piloting them to move part of its $2.5 trillion daily payment flow onto blockchain rails to enable instant, 24/7 transfers and speed cross-border settlement.
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Instant 24/7 transfers
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BNY aims to route a portion of its $2.5 trillion daily flows onto blockchain rails.
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Industry pilots from Goldman Sachs, JPMorgan and HSBC show growing institutional adoption.
Tokenized deposits news: BNY Mellon pilots tokenized deposits to speed cross-border payments—read the update and what banks must know.
What are tokenized deposits?
Tokenized deposits are digital representations of bank deposits issued on a distributed ledger, redeemable one-to-one for commercial bank balances. They act as direct claims on a bank’s on‑balance‑sheet funds and enable real‑time settlement, reducing reliance on legacy batch-clearing systems.
How will BNY Mellon use tokenized deposits?
BNY Mellon is exploring tokenized deposits to move a portion of its $2.5 trillion daily payment flow onto blockchain rails, aiming for instant, around‑the‑clock transfers and streamlined cross‑border settlement. Carl Slabicki, executive platform owner for Treasury Services at BNY Mellon, described the effort as part of upgrading real‑time and international payments (statement reported by Bloomberg).
BNY Mellon is exploring tokenized deposits to move part of its $2.5 trillion daily payment flow onto blockchain rails and modernize cross-border settlements.
BNY, the largest custodian bank in the world, is exploring tokenized deposits to enable clients to transfer funds instantly, 24/7, while easing constraints of its legacy systems.
Carl Slabicki, executive platform owner for Treasury Services at BNY, told Bloomberg that the project is part of an effort to upgrade real-time and cross-border payments, aiming to move a portion of its $2.5 trillion daily payment flow onto blockchain rails.
Tokenized deposits can help “banks overcome legacy technology constraints, making it easier to move deposits and payments across their own ecosystems – and eventually, across the broader market as standards mature,” Slabicki said.
Tokenized deposits are digital coins backed one-to-one by commercial bank money. Unlike stablecoins, which are often backed by securities or third-party reserves, tokenized deposits represent direct claims on commercial bank balances.
Cointelegraph reached out to BNY for comment, but had not received a response by publication.
Why are global banks adopting tokenized deposits?
Major banks are piloting tokenized deposits to achieve real‑time settlement, reduce counterparty and operational risk, and offer 24/7 liquidity for institutional clients. Initiatives from Goldman Sachs and BNY to tokenise money market funds, and pilots by JPMorgan and HSBC, demonstrate a cross‑industry shift toward tokenized cash instruments.
Which institutions are piloting tokenized cash?
- Goldman Sachs + BNY Mellon: tokenized money market funds for institutional investors.
- JPMorgan: launched a tokenized deposit pilot (JPMD).
- HSBC: rolled out cross‑border tokenized deposit services for corporate clients.
- SBI Shinsei Bank + Partior + DeCurret DCP: exploring multicurrency tokenized deposits for real‑time clearing.
| Characteristic | Tokenized deposits | Stablecoins | Traditional transfers |
|---|---|---|---|
| Backing | Commercial bank balances (one‑to‑one) | Securities, reserves, or algorithmic | Bank ledger entries |
| Settlement speed | Real‑time (24/7) | Near‑real‑time or dependent on rails | Batch or same‑day/next‑day |
| Counterparty claim | Direct claim on issuing bank | Claims on issuer reserves | Claims on bank accounts |
How can banks implement tokenized deposits?
Banks should adopt clear standards, regulatory engagement, and multi‑party testing. Collaboration with industry consortia and payment‑rail providers is critical to ensure interoperability and risk controls.
How-to: 5 steps for a tokenized deposit pilot
- Define governance, compliance and KYC/AML controls.
- Choose ledger technology and interoperability standards.
- Tokenize a small, controlled pool of commercial bank balances.
- Run parallel tests against legacy systems to validate reconciliation.
- Scale with industry participants and shared settlement standards.
Frequently Asked Questions
Are tokenized deposits the same as stablecoins?
No. Tokenized deposits are direct digital claims on a commercial bank’s on‑balance‑sheet funds and are issued by banks; stablecoins are typically issued by non‑bank entities and backed by reserves or assets.
Will tokenized deposits replace correspondent banking?
Not immediately. Tokenized deposits can reduce reliance on correspondent banking for many flows, but broad adoption requires standardization, regulatory clarity and integration with existing settlement infrastructures.
Is client money safer with tokenized deposits?
Tokenized deposits preserve the underlying bank claim, but safety depends on issuer solvency, legal frameworks and custody controls. Robust governance and regulatory oversight remain essential.
Key Takeaways
- Real‑time liquidity: Tokenized deposits enable 24/7 settlement for institutional flows.
- Industry momentum: Major banks including Goldman Sachs, JPMorgan and HSBC are piloting tokenized cash solutions.
- Practical steps: Pilots should focus on governance, interoperability, and parallel testing with legacy systems.
Conclusion
BNY Mellon’s tokenized deposits pilot marks an important step toward modernizing high‑value payment flows and cross‑border settlement. As banks, regulators and market infrastructures align on standards, tokenized deposits could materially speed international liquidity and reduce operational frictions. Expect iterative pilots and expanding consortium efforts in the months ahead.
Published: 2025-10-07 • Updated: 2025-10-07 • Author: COINOTAG
