Bank of New York Mellon (BNY Mellon) has launched a tokenized deposit service, allowing institutional clients to convert cash into digital tokens.$BTC
The initiative brings in major cryptocurrency players such as Ripple and Circle into a private blockchain designed to accelerate cash transfers.
Bank of New York launches new digital deposit product targeting the '24/7' market
This new service allows the bank's institutional clients to convert traditional cash deposits into digital tokens on a private ledger.
'Tokenized deposits open the opportunity to extend trusted banking deposits into digital channels—enabling clients to move collateral, margin, and payments faster within a framework built for scale, resilience, and regulatory consistency,' said Carolyn Weinberg, Chief Product and Innovation Officer at Bank of New York. Statement.
This move aims to modernize financial infrastructure by enabling round-the-clock settlement of complex transactions. These complex transactions include margin management and collateral transfers, which often face delays in traditional banking systems.
The New York bank noted that this service meets global standards. The shift to an 'always-on' operational model is occurring in financial markets.
The company stated that institutional investors increasingly need to move assets quickly to seize market opportunities. This urgency also applies to meeting margin call requirements outside of normal banking hours.
Tokenized deposits meet these needs by reducing settlement friction. They also support programmable payments, meaning transactions are executed automatically when specific conditions are met.
Despite adopting a digital interface, the New York bank emphasizes that customer balances are still recorded in its traditional systems to ensure the integrity of regulatory reporting.
This hybrid approach allows the bank to provide blockchain utility while maintaining the safety and compliance standards expected of globally systemically important banks.
Dante Disparte, Chief Strategy Officer and Global Head of Policy and Operations at Circle, explained, 'The interoperability between these systems not only establishes a lasting bridge between the real economy and the broader internet financial system but also indicates that speed and new use cases will not come at the expense of safety and robustness expectations of world-leading financial institutions.'
Ripple Prime is a subsidiary of the blockchain payment company Ripple and one of the first companies to use the service.
This collaboration deepens the existing partnership between the two companies as the New York bank is already a major custodian supporting reserves. The RLUSD stablecoin of Ripple.
By integrating with BNY's digital ledger, Ripple Prime can manage its cash liquidity more flexibly, representing balances on-chain for near real-time settlement.
Noel Kimmel, President of Ripple Prime, stated, 'As more traditional financial institutions shift to digitally native services by 2026, BNY is always at the forefront of the industry, bringing digital assets directly into the banking system.'
In addition to Ripple Prime and Circle, the bank has also announced a list of other institutions participating in the early testing of the platform. These institutions include digital asset companies Securitize, Talos, and Paxos, as well as traditional asset management firms WisdomTree and Invesco.