BNY Mellon Exploring Blockchain-Based Tokenized Deposits

The Bank of New York Mellon (BNY Mellon), one of the oldest and prominent financial institutions, is exploring tokenized deposits to enable blockchain-based payments. This move reflects the bank’s growing focus on new technologies to improve its payment system. 

BNY Mellon New Network Targets 24/7 Cross-Border Payments

According to a Bloomberg report, BNY Mellon’s plan is part of a larger shift toward instant, real-time, and cross-border payments. This could revolutionize the way money is transferred worldwide. 

Tokenized deposits are digital representations of traditional bank deposits created on a blockchain. Unlike cryptocurrencies, these tokens are backed by real money, offering traditional banking security along with the speed of blockchain technology. 

Notably, industry experts affirm that using tokenized deposits speeds up settlements, makes them more transparent, and lowers costs, especially for cross-border transactions that utilize old systems. 

There is no doubt that major global banks and financial institutions are exploring blockchain technology to improve traditional payment methods. BNY Mellon has shown a strong interest in digital assets by launching various services for crypto custody and digital asset management in recent years.

SWIFT Build Global Blockchain Settlement System

In a similar vein, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) has decided to create a blockchain platform for real-time international settlements. Swift is not doing this alone, as it has collaborated with Consensys, an Ethereum (ETH) developer.

Swift said the new ledger will extend its long-standing role in financial communications into a digital environment. 

Furthermore, it will offer interoperability with current banking systems and emerging blockchain networks while maintaining strict regulatory compliance. The platform is also expected to support tokenized assets. It will do this with the specific asset types to be determined by central and commercial banks.

Expanding a Critical Global Payment Backbone

The move into blockchain reflects Swift’s recognition of changing technology in traditional finance. Once viewed as a niche innovation, shared ledgers are increasingly embraced by banks and asset managers.

Recall that in June, JPMorgan Chase filed for a trademark application for “JPMD,” hinting at a potential expansion of its digital asset strategy. As reported by TheCoinRise, the application outlines a broad suite of services. These include digital asset trading, exchange, transfers, clearing, and payment processing. 

It is worth noting that all of these are centered around blockchain-based infrastructure. The scope of JPMorgan’s services, as described, suggests that it may be laying the groundwork to move more of its financial operations onto blockchain rails.