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BNY Mellon Explores Tokenized Deposits and Blockchain Payment Solutions

BNY Mellon Explores Tokenized Deposits and Blockchain Payment Solutions

According to Bloomberg, BNY Mellon is testing blockchain-based tokenized deposits to improve global payment efficiency and reduce settlement times, joining other major banks like JPMorgan in adopting blockchain innovation.

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Fact Check
The evidence strongly confirms the statement. Testimony from BNY Mellon's Global Head of Digital Assets, Caroline Butler, directly references the concepts of 'tokenized deposits' and 'blockchain technology' as a potential 'payment rail' (Sources 1, 7, 9, 12). This indicates active exploration. Further evidence includes BNY Mellon's work with tokenized funds and multiple sources mentioning their involvement with blockchain platforms and digital assets (Sources 3, 6, 8, 11).
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Summary

BNY Mellon, the world’s largest custodial bank with $55.8 trillion in assets under custody, is testing tokenized deposits to modernize its payment infrastructure. The pilot seeks to enable near-instant settlement and lower transaction costs by processing deposits over blockchain networks. Carl Slabicki from BNY Mellon stated the technology could help banks overcome legacy constraints and enhance liquidity management. The bank, which handles about $2.5 trillion in daily payments, joins institutions like JPMorgan, which launched its JPMD token, and European banks developing MiCA-compliant euro stablecoins. Additionally, BNY Mellon recently collaborated with Goldman Sachs on tokenized money market funds.

Terms & Concepts
  • Tokenized Deposits: Digital representations of traditional bank deposits recorded on blockchain, enabling faster, more transparent, and programmable transactions.
  • Blockchain: A decentralized digital ledger that securely records transactions across a distributed network, ensuring transparency and immutability.
  • MiCA-compliant Stablecoin: A stable digital currency issued under the EU’s Markets in Crypto-Assets (MiCA) framework, ensuring regulatory compliance and financial stability.