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BNY Mellon, the world’s largest custodial bank, is exploring blockchain technology to modernize its massive payments infrastructure. The bank is testing tokenized deposits, a move that could allow faster transactions and potentially lower costs for clients.
What’s Happening
- Modernizing Payments: BNY Mellon handles around $2.5 trillion in payments every day. By using tokenized deposits on a blockchain, the bank hopes to enable near-instant settlement and streamline its global payment system.
- Overcoming Legacy Limits: According to Carl Slabicki of BNY Mellon, blockchain technology could help banks move money faster within their networks and eventually across the wider financial system, overcoming traditional operational constraints.
- Joining Industry Trend: BNY Mellon is not alone. Other major banks, including JPMorgan and several European banks, are also experimenting with tokenized funds and stablecoins to enhance efficiency in payments and settlements.
- Past Collaborations: This summer, BNY Mellon teamed up with Goldman Sachs to launch tokenized money market funds for clients, reflecting the institution’s careful but growing interest in blockchain-based finance.
Looking Ahead
While BNY Mellon is approaching blockchain adoption cautiously compared to some other financial institutions, the experiments with tokenized deposits signal a potential shift in how traditional banks handle payments. If successful, these efforts could make large-scale transactions faster, more efficient, and more cost-effective, shaping the future of global banking.
This article reflects the opinions of the publisher based on available information at the time of writing. It is not intended to provide financial advice, and it does not necessarily represent the views of the news site or its affiliates. Readers are encouraged to conduct further research or consult with a financial advisor before making any investment decisions.
