PERSONAL FINANCE
BNY Melon has launched tokenized bank deposits to enable 24/7 on-chain settlement without changing regulation, compliance, or bank liability.
BNY launches tokenized deposits: Bank money quietly goes on-chain
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For decades, institutional cash settlement has relied on batch-based banking systems designed for end-of-day processing. BNY’s move signals how that infrastructure is being adapted for always-on, real-time markets—without changing what bank money legally is.
What BNY did instead was more consequential. In January 2026, the bank launched a live institutional pilot enabling an on-chain mirror of client deposit balances on its Digital Assets platform, beginning with collateral and margin tokenization use cases.
Institutional clients can now move existing bank deposits using blockchain rails, while the money itself remains within BNY’s traditional systems.
This is not just about crypto replacing bank money. It’s bank money moving faster. The deposits stay regulated, reporting and compliance remain unchanged. The only thing that shifts is the settlement layer.
How BNY reworked cash settlements?
According to Bloomberg, this capability sits inside BNY Mellon’s longer-term “Project Crypto” roadmap, an effort to modernise clearing and settlement so regulated bank cash can move 24/7 instead of through fixed batch windows.
Why settlement speed matters at institutional scale:
Global derivatives markets routinely require trillions of dollars in margin to be posted and adjusted, often within hours during volatile periods.
Even today, many collateral movements still depend on T+1 or intraday batch processing, creating liquidity buffers and operational drag.
Delays of even a few hours can force institutions to overfund positions or hold excess cash.
What BNY changed: Not the deposit itself, but the way it can be used. The system runs on a private, permissioned blockchain finance, where tokenized balances act as digital book entries mirroring existing demand deposit claims, rather than newly issued assets.
Crucially, regulatory, accounting, and reporting records continue to sit on BNY’s core banking systems.
The limits of existing settlement rails
Global financial
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