The Bank of New York Mellon (BNY), the world's largest custodian bank, has launched tokenized deposit services for institutional clients, according to Bloomberg.
This service creates a digital exposure of assets held by the institution on the blockchain, allowing funds to be used as collateral in lending and margin operations.
The solution also enables the bank to expedite payments and operate around the clock, bypassing the limitations of traditional fiat channels.
Among the first clients of BNY's tokenized deposit service are Intercontinental Exchange, Citadel Securities, DRW Holdings, Ripple Prime, Baillie Gifford, and Circle Internet Group.
The launch comes a few months after reports of the bank's experiments with deposit tokens.
Experts attribute the growing interest of U.S. financial institutions in this technology to the passage of the GENIUS Act, which establishes regulations for stablecoins and is the first significant regulatory framework for the crypto industry in the country. Unlike fiat-backed "stablecoins," tokenized deposits are created within the existing banking system and can generate interest income.
As a reminder, Standard Chartered predicts that by 2028, the market capitalization of tokenized real-world assets, excluding stablecoins, will grow to $2 trillion.