BNY has launched a pilot of tokenized deposits, allowing institutional clients to move funds using blockchain technology.
The initiative marks the latest step by a major global bank into the digital assets space and is the first phase of BNY’s strategy to tokenize deposits, beginning with collateral and margin use cases.
Under the pilot, announced on Friday, BNY has enabled an on-chain mirrored representation of client deposit balances on its Digital Assets platform. The tokenized deposits operate as digital book entries that reflect participating clients’ existing demand deposit claims against the bank. While balances are mirrored on-chain, they continue to be recorded on BNY’s traditional systems for regulatory, accounting, and reporting purposes.
The capability runs on BNY’s private, permissioned blockchain. The bank said the launch is designed to support programmable, near-real-time cash movement, as is increasingly demanded by financial market participants.
“As global financial markets shift towards an always-on operating model, institutions are seeking faster and more efficient ways to move assets — with greater settlement certainty, transparency, lower friction and capability to unlock liquidity,” said BNY chief product and innovation officer Carolyn Wei.
BNY, the world’s largest custodial bank with nearly $58 trillion in assets under custody, has been exploring tokenized deposits for some time. Banking Exchange first reported in late 2025 that the bank was testing the capability, which has now progressed into a live pilot for institutional clients.
Early participants in the initiative include Baillie Gifford, Circle, Citadel Securities, Galaxy, Ripple Prime, Invesco, and WisdomTree.
Dante Disparte, chief strategy officer at Circle, said the move demonstrated that “speed and new use cases do not come at the expense of safety and soundness expectations of the world’s leading financial institutions.”
