The Bank of New York (BNY) Mellon has launched a tokenized deposit service that allows institutional clients to convert cash into digital tokens.
The initiative brings major crypto players, including Ripple and Circle, onto a private blockchain designed to speed up cash transfers.
BNY Targets ‘Always-On’ Markets With New Digital Deposit Offering
The new offering allows the bank’s institutional clients to convert traditional cash deposits into digital tokens on a private ledger.
“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,” Carolyn Weinberg, BNY’s Chief Product and Innovation Officer, stated.
The move aims to modernize financial infrastructure by enabling 24/7 settlement for complex transactions. These include margin management and collateral movement, which often face delays in the traditional banking system.
BNY noted that the service aligns with a global shift toward an “always-on” operating model in financial markets.
According to the firm, institutional investors increasingly need to move assets instantly to capitalize on market opportunities. This urgency applies equally to meeting margin calls outside standard banking hours.
Tokenized deposits address these needs by reducing settlement friction. They also enable programmable payments, in which transactions execute automatically when specific conditions are met.
Despite the digital interface, BNY emphasized that client balances are still recorded in its traditional systems to ensure regulatory reporting integrity.
This hybrid approach allows the bank to offer blockchain utility while maintaining the safety and compliance standards expected of a global systemically important bank.
“Interoperability between these systems not only builds durable bridges between the real economy and the broader internet financial system but also demonstrates that speed and new use cases do not come at the expense of safety and soundness expectations of the world’s leading financial institutions,” Dante Disparte, Circle’s Strategy Officer and Head of Global Policy and Operations, explained.
Ripple Prime, a subsidiary of blockchain payments firm Ripple, is among the first to utilize the service.
The collaboration deepens the existing relationship between the two firms, as BNY already serves as the primary custodian for the reserves backing Ripple’s RLUSD stablecoin.
By integrating with BNY’s digital ledger, Ripple Prime can manage its cash liquidity with greater flexibility, representing balances on-chain for near-real-time settlement.
“As more traditional financial institutions move into digital-native services in 2026, BNY is staying ahead of the curve, bringing digital assets directly into the banking system,” Noel Kimmel, Ripple Prime President, said.
In addition to Ripple Prime and Circle, the bank announced a roster of other early participants testing the platform. These include digital asset firms Securitize, Talos, and Paxos, as well as traditional asset managers WisdomTree and Invesco.
