BNY has launched tokenized bank deposits for institutional clients, marking another step in the integration of blockchain technology into traditional finance.
The initiative allows clients to hold onchain representations of cash balances or depositor claims against the bank.
These tokenized deposits are issued on BNY’s in-house permissioned blockchain network.
Unlike public blockchains, permissioned networks restrict participation to approved institutions and counterparties.
BNY said the deposits will initially support collateral and margin requirements for institutional transactions.
Additional functionality is expected to be added over time as client use cases expand.
The bank framed the launch as a response to shifting expectations in global financial markets.
“As global financial markets shift towards an always-on operating model, institutions are seeking faster and more efficient ways to move assets — with greater settlement certainty, transparency, lower friction and capability to unlock liquidity.”
The move reflects growing pressure on banks to modernize legacy infrastructure.
Traditional settlement systems rely on multiple intermediaries and limited operating hours.
This structure can trap capital during weekends, holidays, and overnight periods.
Blockchain-based systems, by contrast, operate continuously and settle transactions more quickly.
By issuing deposits onchain, BNY aims to reduce settlement delays while improving transparency.
The launch follows a broader trend of banks experimenting with tokenized representations of real-world assets.
Tokenization allows financial instruments to be issued, transferred, and settled digitally on blockchain networks.
This approach is increasingly seen as a foundation for always-on capital markets.
Regulators have begun acknowledging this shift at the policy level.
In September 2025, the US Securities and Exchange Commission and the Commodity Futures Trading Commission proposed expanding trading hours.
“Further expanding trading hours could better align US markets with the evolving reality of a global, always-on economy,” the joint statement said.
The proposal highlighted structural limitations in existing market infrastructure.
Current systems depend on batch processing and human oversight, which restricts operating hours.
Always-on markets would allow assets to trade and settle at any time.
Blockchain technology removes some of the intermediaries that slow traditional settlement processes.
It also enables near-instant reconciliation and atomic settlement of transactions.
Real-world asset tokenization is a key enabler of this model.
Assets such as bonds, funds, real estate, and even collectibles can be represented digitally onchain.
This allows traditionally illiquid assets to trade more efficiently across global markets.
However, regulators have cautioned that not all assets are suitable for 24/7 trading.
The SEC and CFTC acknowledged that a universal always-on model may not work across every asset class.
Liquidity, volatility, and investor protection concerns vary significantly between markets.
BNY’s permissioned approach reflects this measured stance.
By keeping tokenized deposits within a controlled network, the bank can meet compliance and risk requirements.
The launch positions BNY as an early mover in institutional onchain finance.
As regulatory frameworks evolve, tokenized bank deposits could become a standard settlement layer for capital markets.
