BNY Mellon testing tokenized deposits to keep pace with blockchain-based finance shift

Bank of New York Mellon ( BNY Mellon), the world’s largest custodial bank, is testing tokenized deposits to modernize its global payment ￰0￱ $55.8 trillion custodial bank seeks to keep pace with a growing shift toward blockchain-based ￰1￱ to reports, the effort, which is still in the exploratory phase, aims to let clients make payments using tokenized versions of their ￰2￱ that end, clients can transfer value instantly across borders, potentially reducing settlement times that can currently take days for large institutional ￰3￱ currently handles approximately $2.5 trillion in payments ￰4￱ deposits are bank-issued, transferable digital coins that represent a claim on commercial bank ￰5￱ cryptocurrencies, these tokens are backed by real deposits, ensuring stability and reducing ￰6￱ Mellon dives deeper into the blockchain ocean Traditional Finance organizations are gradually increasing their use of the technology that underpins digital assets for fund ￰7￱ Mellon is the latest financial giant to make a move with its exploration of tokenized ￰8￱ far back as 2023, the company had voiced interest in pursuing certain initiatives, including tokenization, the use of distributed ledger technology, and digital cash.

Now, by moving to decentralized ledgers, BNY will be able to settle transactions near-instantly and operate 24/7, a contrast with legacy correspondent networks. BNY’s Carl Slabicki told Bloomberg the technology could help banks “overcome legacy constraints,” allowing them to move money faster within their own networks and eventually across the wider financial ￰9￱ Mellon joins a growing list of major banks experimenting with tokenized ￰10￱ reported by Cryptopolitan, JPMorgan began trialing its JPMD token in June on Coinbase’s Base blockchain, while HSBC recently rolled out a tokenized deposit service for corporate clients to facilitate cross-border currency transactions.

Additionally, messaging network Swift has been developing a blockchain-based shared ledger prototype for real-time cross-border ￰11￱ Europe, nine banks are building a MiCA-compliant euro ￰12￱ the same time, BNY Mellon would join the likes of Switzerland-based Digital Assets, Robinhood, and Gemini, which already launched their tokenized stocks across different regions. Meanwhile, over the summer, BNY Mellon and Goldman Sachs teamed up to roll out tokenized money market funds for ￰13￱ financial institution’s CEO, Robin Vince, has in the past said the bank wouldn’t be as aggressive as other lenders in trying to gain crypto ￰14￱ also has an active working relationship with a few top crypto firms, including San Francisco-based blockchain payments firm Ripple Labs ￰15￱ Mellon is the official custody partner for Ripple’s ￰16￱ also has investments in top cryptocurrency projects, such as BlackRock’s iShares Bitcoin Trust ETF and Grayscale’s Bitcoin Trust ￰17￱ latest project is part of BNY Mellon’s plan to expand its crypto reach and modernize its infrastructure, which includes scaling real-time, instant, and cross-border ￰18￱ banks to pilot tokenized deposits The Reserve Bank of India (RBI) will join commercial banks in the country to test tokenized ￰19￱ will make way for new payment systems that are based on ￰20￱ RBI’s latest test, revealed by Chief General Manager Suvendu Pati today, will see commercial banks explore tokenized ￰21￱ years, the RBI has sought to suppress crypto adoption in the country.

However, a 2018 circular prohibiting banks from servicing crypto companies was eventually struck down by the Supreme Court. Still, the RBI remains broadly opposed to ￰22￱ the RBI takes a negative view of stablecoins, it doesn’t oppose digital money more ￰23￱ fact, the Indian CBDC has been in a large-scale pilot program for three years ￰24￱ deposits exist in the middle ground between stablecoins and ￰25￱ has caused several other central banks to favor tokenized deposits over ￰26￱ this year, Bank of England Governor Andrew Bailey said he would rather see banks tokenize deposits than issue ￰27￱ warned it could suppress the availability of ￰28￱ Bybit now and claim a $50 bonus in minutes