BNY Mellon Launches Tokenized Deposits; ICE, Ripple & Citadel First to Pilot

Bank of New York Mellon has officially integrated blockchain rails into its core treasury services, allowing institutional clients to tokenize commercial bank deposits for 24/7 settlement. The move creates a live production environment for digital cash at the world’s largest custodian, which now oversees $57.8 trillion in assets under custody (AUC).

The Mechanism

Unlike stablecoins, which are bearer assets backed by reserves, BNY’s tokenized deposits function as on-chain representations of funds held directly in existing bank accounts. This structure circumvents the need for third-party redemption, allowing clients to utilize the tokens for immediate margin calls, collateral transfer, and cross-border payments outside of standard banking hours.

Carolyn Weinberg, BNY’s Chief Product and Innovation Officer, framed the utility around infrastructure rather than speculation:

“This is very much about connecting traditional banking infrastructure and traditional banking institutions with emerging digital rails and digital ecosystem participants in a way that institutions trust.”

Institutional Order Flow

The launch cohort includes high-frequency trading firms and market infrastructure giants, signaling a shift from retail experiments to backend plumbing. Intercontinental Exchange (ICE), parent company of the NYSE, Citadel Securities, and DRW Holdings are among the first users. Ripple Prime and stablecoin issuer Circle have also onboarded, linking the service directly to crypto-native liquidity corridors.

For ICE, the integration supports a long-term pivot toward continuous clearing, enabling traders to move collateral instantly rather than waiting for T+1 settlement cycles. The efficiency gain is critical for firms like Citadel, where capital efficiency on weekends has historically been zero.

Market Reaction & Context

The rollout follows the passage of the U.S. GENIUS Act, which clarified the regulatory treatment of bank-issued digital assets. BNY’s entry challenges JPMorgan’s JPM Coin, which recently expanded its own programmable payment features. Despite the institutional validation, XRP traded muted at $2.14 (-1.5%), struggling to break resistance as the broader market digested the shift in settlement dominance from crypto-native tokens to bank-led ledgers.