BNY Mellon Plans Tokenized Deposits for On-Chain Payments
Bank of New York (BNY) Mellon is working to offer tokenized deposits to its customers. This will allow clients to make payments using blockchain networks.
BNY Mellon is one of the largest custodial banks, managing $55.8 trillion in assets. The bank is testing tokenized deposits to improve its payment systems, Bloomberg reported on Tuesday.
What Are Tokenized Deposits?
Tokenized deposits are digital tokens that represent a customer’s bank funds. They act like digital versions of traditional bank deposits.
Carl Slabicki, executive platform owner for Treasury Services at BNY Mellon, said tokenized deposits can help banks overcome old technology limits. This will allow easier movement of funds within banks and across the financial market as standards develop.
Industry Moves Toward Blockchain Payments
- BNY Mellon’s treasury services handle about $2.5 trillion in payments daily.
- In July, BNY Mellon and Goldman Sachs launched a project for investing in money market funds using blockchain.
- JPMorgan is testing a token called JPMD on the Base Layer 2 network.
- HSBC introduced tokenized deposits for secure cross-border transfers.
- SWIFT announced a blockchain-based ledger for 24/7 cross-border payments with Consensys and over 30 banks.
These steps show growing interest in faster, cheaper payments through blockchain technology among major financial firms.
