BNY has launched an on-chain mirrored representation of client deposit balances on its digital assets platform, marking its first move into tokenised deposits, according to information released by the bank.
The setup creates on-chain digital book entries that reflect participating clients’ existing demand deposit claims on BNY. The initial use cases are focused on collateral and margin workflows, where the bank is seeking to extend the way cash can be used within institutional market infrastructure.
The on-chain deposit representations operate on BNY’s private, permissioned blockchain and remain subject to the bank’s existing risk, compliance and control frameworks. BNY says early participants include a mix of financial institutions and digital-native firms.
Future plans for cash movements
BNY states that it plans to support rules-based, near real-time cash movements in the future, with the stated aim of reducing settlement friction and improving liquidity and operational efficiency for institutional clients.
Carolyn Weinberg, chief product and innovation officer at BNY, said the initiative extends traditional bank deposits to on-chain environments. Steve Kurz, global co-head of digital assets at Galaxy, said tokenised deposits could support programmability and continuous settlement within the banking system, adding that Galaxy is working with BNY on the capability as it is introduced.
