thecryptobasic.com
Bank of New York Mellon (BNY) has taken another major step into the digital asset space with the launch of a tokenized deposit service, with Ripple participating in the initiative.
The new service allows BNY clients to transfer funds using blockchain rails, creating a digital representation of deposits already held at the bank.
Unlike cryptocurrencies or stablecoins, these tokenized deposits remain fully embedded within the traditional banking system. Notably, the bank initially launched a pilot version of the tokenized deposit service in October 2025.
In a statement, BNY noted the service seeks to support faster payments, collateral management, and margin transactions. It suggested that the service will also advance its goal of achieving 24/7 operability.
By moving deposits onto a blockchain, transactions that typically take hours can be settled more efficiently. The initiative is also a critical building block for the tokenization of financial assets such as stocks and bonds.
Ripple’s Involvement
It is worth mentioning that Ripple is directly involved in the initiative through Ripple Prime, its prime brokerage arm, which was acquired for $1.25 billion last year. Ripple’s brokerage firm is listed among the early clients of the tokenized deposit service.
Notably, Ripple Prime joins a high-profile group that includes Citadel Securities, Intercontinental Exchange (ICE), asset manager Baillie Gifford, DRW Holdings, and stablecoin issuer Circle.
For Ripple Prime, access to tokenized bank deposits could significantly improve liquidity management, enhance collateral efficiency, and accelerate settlement times. These components are essential for institutional-grade digital asset operations.
Moreover, this development strengthens Ripple’s position at the intersection of traditional finance and blockchain-based infrastructure.
TradFi Leveraging Blockchain to Enhance Payments
Meanwhile, BNY’s tokenized deposit initiative forms part of an industry-wide push by traditional financial institutions to leverage blockchain for more efficient payments. For example, JPMorgan Chase has been expanding its JPM Coin for institutional clients, while HSBC plans to roll out its own tokenized deposit service to corporate clients in the U.S. and the UAE in the first half of the year.
This latest move does not mark BNY’s first entry into the digital asset space. The bank has been active in the sector for several years. In July, it partnered with Goldman Sachs to launch a platform that enables institutional clients to trade tokenized shares of money market funds.