Bank of New York Mellon has enabled on-chain mirrored representations of client deposit balances on its Digital Assets platform. BNY, the world's largest custodian bank with $52.1 trillion in assets under custody and administration, is using a private blockchain to create digital book entries that mirror existing demand deposit claims.
Settlement Mechanism
The blockchain representations enable rules-based, near real-time cash movements on a 24/7 basis. Unlike stablecoins or tokenized securities, this approach creates blockchain entries that mirror existing bank deposits. The regulatory and economic properties of traditional demand deposits are maintained while adding the programmability and settlement speed of blockchain rails.
Early Participants
Early participants in the platform include Ripple, Galaxy, Intercontinental Exchange (ICE), and Talos.
Infrastructure Context
BNY's approach differs from other institutional digital asset settlement initiatives. Fiserv's INDX platform settles in fiat USD through the FDIC-insured banking network. Visa has expanded USDC stablecoin settlement to US banks. Mastercard partnered with SoFi on a bank-issued stablecoin. Stripe and Paradigm built the Tempo blockchain for stablecoin settlement. BNY's model instead creates blockchain representations of existing deposits held at the custodian - an approach that avoids introducing a new currency instrument while gaining blockchain settlement properties.