BNY (NYSE: BK) has launched new digital cash capabilities by enabling the on-chain mirrored representation of client deposit balances on its Digital Assets platform. Announced recently, this initiative represents the first concrete step in BNY’s strategy to tokenize bank deposits, paving the way for real-time, on-chain settlement among industry participants.
The new feature creates digital book entries on BNY‘s private, permissioned blockchain that mirror clients’ existing demand deposit claims against the bank.
These on-chain representations maintain full backing by traditional deposits, with balances still recorded on BNY’s legacy systems to ensure regulatory compliance, reporting integrity, and adherence to established risk and control frameworks.
Initially focused on collateral and margin workflows, the capability allows institutional clients to move value more efficiently across digital rails.
This reduces settlement friction, enhances liquidity, and introduces greater speed, transparency, and certainty in transactions.
Looking ahead to the foreseeable future, BNY plans to support rules-based, near real-time cash movements, enabling programmable payments where funds transfer automatically based on predefined conditions.
Carolyn Weinberg, BNY’s Chief Product and Innovation Officer, emphasized the transformative potential:
“Tokenized deposits provide us with the opportunity to extend our trusted bank deposits onto digital rails — enabling clients to operate with greater speed across collateral, margin, and payments, within a framework built for scale, resilience, and regulatory alignment.”
This move aligns with the industry’s shift toward “always-on” financial markets, where institutions demand 24/7 operability to capitalize on opportunities and manage risks in real time.
Tokenized deposits serve as critical connective tissue, interoperating with stablecoins (such as USDC from Circle), tokenized money market funds, and other digital assets while remaining fully regulated bank money—offering advantages over non-bank alternatives by preserving interest accrual and institutional trust.
The launch has garnered strong support from a diverse group of early participants, including major players like Anchorage Digital, Baillie Gifford, Circle, Citadel Securities, Digital Asset, DRW Holdings, Galaxy, ICE, Invesco, Nodal Clear, Paxos, Ripple Prime, Securitize, StoneX Digital, Talos, WisdomTree, and zerohash.
Industry professionals have acknowledged the development.
Nathan McCauley, CEO of Anchorage Digital, called it a “milestone moment for digital cash adoption,” accelerating a programmable finance future.
Theo Golden from Baillie Gifford highlighted tokenization of cash as a key enabler for broader asset tokenization, unlocking interoperability and efficiency.
Dante Disparte of Circle welcomed the bridges between traditional finance and digital ecosystems, noting that speed need not compromise safety.
BNY, managing $57.8 trillion in assets under custody/administration and $2.1 trillion under management as of late 2025, continues to position itself at the forefront of institutional digital innovation.
By bridging conventional banking with emerging blockchain infrastructure, this extension not only modernizes cash movement but also supports the evolution toward a more efficient, always-available global financial system.
As tokenization gains momentum—following similar efforts by banking institutions like JPMorgan—the launch now underscores BNY’s commitment to regulated, scalable progress in digital finance.
