Tokenization is reshaping financial services, enabling faster settlements
The banking world is changing fast. Traditional methods are slowly giving way to digital innovation, and major institutions are turning to blockchain and tokenized deposits to move money faster, easier, and more efficiently.
According to Bloomberg, BNY Mellon, one of the world’s largest custodians with $55.8 trillion in assets under management and custody, is exploring tokenized deposits, a way for clients to make payments using blockchain technology.
The initiative is part of BNY Mellon’s broader plan to modernize its infrastructure, including real-time, instant, and cross-border payments. Carl Slabicki, who leads the bank’s Treasury Services platform, explained that tokenized deposits could help banks break free from outdated systems.
Tokenized deposits could 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.
With this technology, banks could move money around more easily, both within their own systems and, eventually, across the wider financial world.
BNY Mellon’s treasury services already handle roughly $2.5 trillion in daily payments. It has been exploring digital assets and blockchain for years. Back in July, BNY Mellon and Goldman Sachs announced a partnership to use blockchain technology for tracking customer ownership of certain money market funds (MMFs).
BNY Mellon is not the only bank exploring digital tools.
Major banks and global companies are exploring new ways to move money faster and cheaper using digital tools. JPMorgan Chase rolled out a pilot token called JPMD for dollar deposits, while HSBC launched a tokenised deposit service letting corporate clients send money across borders quickly and securely.
Tokenised deposits, which are digital versions of the cash people already hold in their accounts, are gaining traction. As these coins run on blockchain networks, payments can settle instantly, cutting costs and delays.
Tokenization is already transforming financial services far beyond payments. It is making processes like digital bond issuance, custody, and settlement more efficient, while also enabling the tokenization of traditional assets such as bonds, real estate, and money markets.
Building on this momentum, global financial network SWIFT has teamed up with over 30 major banks, including BNY Mellon, to make cross-border payments instantaneous.
These partnerships are helping to develop a shared blockchain ledger designed for real-time settlements.
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