BNY Mellon, the oldest bank in the United States, is testing tokenized deposits for blockchain-based payments. The goal is to represent bank deposits as digital tokens, enabling more efficient, faster, and more transparent transactions.
The Bank of New York Mellon (BNY Mellon), the oldest bank in the US and a global heavyweight in asset and payment management, is testing the use of tokenized deposits to process payments directly through blockchain networks. As Bloomberg reports, the bank is exploring how client balances can be represented as digital tokens on a blockchain to make payments more efficient, faster, and transparent.
With this step, BNY is responding to the increasing digitalization of the financial sector and the growing competition from stablecoins and blockchain-based payment systems.
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New infrastructure for payments
BNY’s Treasury Services division processes around 2.5 trillion US dollars in payments every day. Tokenized deposits could fundamentally transform this process by digitally representing traditional bank deposits on a one-to-one basis. Unlike stablecoins, these tokens would be fully backed by regulated bank deposits and directly integrated into the existing banking infrastructure.
The aim is to create a bridge between traditional bank accounts and blockchain payment systems – a step that could enable real-time transactions around the clock. According to Bloomberg, Carl Slabicki, Co-Head of Global Payments at BNY Mellon, said the bank is preparing for a future in which blockchain-based payment flows could become part of the institutional standard. The tests initially focus on internal transactions between subsidiaries, with connections to external networks planned for a later phase.
Competition from JPMorgan and HSBC
With this project, BNY Mellon joins a growing list of global financial institutions aiming to leverage blockchain for payments. JPMorgan already operates its own blockchain network, “Onyx,” which processes billions of dollars in daily transactions. HSBC is also experimenting with tokenized deposits for international payment flows.
BNY could position itself as a key infrastructure partner for regulated blockchain payments, supported by its broad client base and market position. A successful model would allow banks to process payments in real time regardless of business hours, manage liquidity more efficiently, and enhance regulatory transparency.
Significance in the broader context
BNY Mellon’s tests are more than a technical experiment. They demonstrate that banks are beginning to view blockchain not merely as an investment vehicle or “crypto novelty,” but as core infrastructure for the global financial system. While stablecoins have so far led innovation, tokenized bank deposits could reshape the landscape – offering full regulatory integration and direct linkage to existing financial systems.
This points to a future where traditional payment networks, stablecoins, and tokenized bank deposits coexist. Whether these systems ultimately cooperate or compete will determine how the international payments landscape evolves in the coming years. With its pilot program, BNY Mellon is positioning itself early as a bridge builder in this new era.
