Bank of New York Mellon (BNY) is moving its transfer agency record-keeping business onto blockchain, aiming to create a single on-chain ownership ledger and reduce reliance on intermediaries, the Financial Times reported Thursday.
BNY, which has more than $59 trillion in assets under custody and administration, services about $8.6 trillion in assets across 7.6 million accounts through its transfer agency operations. "We think of BNY as modernizing a function that sits behind every single fund transaction by bringing the books and records onchain," said Carolyn Weinberg, chief product and innovation officer at the 242-year-old financial services company.
The bank said the shift would create a single record of ownership, cutting out the need for multiple intermediaries in fund transactions.
Initial Clients and Use Cases
- Baillie Gifford, a BNY client managing more than $261 billion, will use the service for what the companies describe as the first fully native U.K.-regulated tokenized fund, according to the FT.
- BlackRock and Dreyfus, BNY's money-market and cash-management business, are expected to use the infrastructure for planned tokenized funds.
- BlackRock, Franklin Templeton and other asset managers have already launched tokenized money-market funds that hold short-term debt and cash but issue ownership interests as blockchain tokens.
Emily Portney, BNY's global head of asset servicing, the bank's largest business, said the firm "fully recognize[s] you've got trillions and trillions of dollars' worth of funds that... will continue to exist on traditional rails." BNY did not immediately respond to a CoinDesk request for further information.
Edwin Mata, CEO and founder of tokenization platform Brickken, estimates that Wall Street will run entirely on blockchain technology by 2030. Separately, America's biggest banks, including JPMorgan, Citi and Bank of America, plan to build a shared, tokenized deposit network by the first half of 2027 to protect their deposits from competition posed by stablecoins.
According to the FT, BNY does not expect its traditional systems to disappear. The bank will keep its existing transfer agent operations running alongside the new blockchain ledger, with trillions of dollars in funds expected to remain on existing rails for years. Blockchain adoption also carries cyber risks, including bugs in smart contracts and the bridges linking different networks. BNY is betting that a single ownership ledger can replace some of the costly reconciliation work still required in fund administration.