- BNY is expanding its use of blockchain to modernize financial infrastructure and custody services.
- The bank has launched a blockchain-based transfer agent for tokenized fund transactions and records.
- The initiative aims to enable faster settlements, free up capital, and reduce transaction delays.
The Bank of New York Mellon Corporation (BNY) is actively deploying blockchain technology to transform its core financial infrastructure, record-keeping, and cross-border custody solutions.
BNY’s strategy focuses on tokenizing traditional financial assets and introducing real-time, round-the-clock operations. The Wall Street giant has already launched a blockchain-based digital transfer agent to manage transactions and ownership records for tokenized funds.
BNY’s digital division manages its transfer agency business, overseeing approximately $8.6 trillion in assets across 7.6 million accounts. The platform combines a digital-native transfer agency operating on public blockchains with traditional off-chain record-keeping, creating a hybrid operating model.
BNY’s Blockchain Goals
By adopting blockchain technology for record-keeping and other functions, BNY aims to commercialize a round-the-clock settlement framework for US Treasuries, eliminating weekend and overnight gaps. The bank is also launching a private blockchain pilot to test tokenized Treasuries across global time zones.
Separately, BNY has partnered with Finstreet and ADI Foundation in the UAE to deliver institutional-grade digital asset custody in Abu Dhabi. The bank’s Middle East expansion has an initial focus on Bitcoin (BTC) and Ether (ETH). It also plans to expand the offering to include stablecoins and tokenized assets.
BNY has also introduced tokenized deposits for institutional clients to handle programmable, on-chain cash. It has also integrated directly with Goldman Sachs’ GS DAP blockchain to track mirrored record tokenization for Money Market Funds.
Potential Client Benefits
BNY’s clients stand to benefit from the planned blockchain implementation in multiple areas. The solution will allow the immediate freeing up of capital, eliminating delays caused by multi-day clearing cycles. It will also reduce the risk of counterparty settlement to near-zero levels through instant, simultaneous asset exchanges.
The innovation will enable BNY clients to streamline operations and lower costs through smart contracts that automate tedious corporate actions, dividend distributions, and proxy voting. The system could simplify transfer agency operations by reducing intermediaries and lowering transaction costs. Clients will also be able to view tokenized funds alongside traditional assets through a unified custody dashboard.
Related: BNY Targets UAE Crypto Market With New Custody Partnership
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