BNY Mellon Tests Tokenized Deposits for Blockchain Payments

BNY Mellon, the oldest bank in the United States, is pioneering the use of tokenized deposits to facilitate blockchain-based payments. The initiative aims to digitize traditional bank deposits, enabling faster, more efficient, and transparent transactions. By representing client balances as digital tokens on a blockchain, BNY Mellon seeks to bridge the gap between conventional banking and decentralized payment systems.

The bank's Treasury Services division, which processes $2.5 trillion in daily payments, could see a transformative shift with this technology. Unlike stablecoins, these tokenized deposits WOULD be fully backed by regulated bank reserves, ensuring compliance and integration with existing financial infrastructure. This move underscores BNY Mellon's response to the rising competition from blockchain-native payment solutions and the broader digitalization of finance.

Carl Slabicki, Co-Head of the project, highlighted the potential for real-time, 24/7 transactions. The trial reflects a strategic effort to modernize payment systems while maintaining the trust and stability of traditional banking.