BNY Launches Tokenized Deposit Service for ICE, Citadel, and Circle
What Has BNY Launched?
BNY has launched a tokenized deposit service for a small group of institutional clients, turning years of experimentation into a live banking product. The service creates blockchain-based representations of client deposits held directly at the bank and is designed for use in collateral, margin, and settlement workflows.
According to Bloomberg, the initial rollout includes six clients: Intercontinental platform, Citadel Securities, DRW Holdings, Ripple Prime, Baillie Gifford, and Circle Internet Group. A spokesperson for ICE confirmed the firm will support the deposits across its clearinghouses on a 24-hour basis.
The launch follows earlier reporting that BNY was exploring tokenized deposits to ease payment bottlenecks inside its treasury unit, which processes roughly $2.5 trillion in transactions each day. With the product now live, the bank has moved from testing into production.
Investor Takeaway
How Do Tokenized Deposits Differ From Stablecoins?
Tokenized deposits are not stablecoins. They remain direct liabilities of the issuing bank and accrue interest like traditional deposits. Unlike stablecoins, which sit outside , these instruments stay fully inside regulated banking frameworks.
BNY said the deposits are built to support programmable settlement, allowing collateral and margin movements to be automated. The bank is also working toward round-the-clock operation, a key feature for global markets that no longer pause on weekends or holidays.
“This is very much about connecting traditional banking infrastructure and traditional banking institutions with emerging digital rails and in a way that institutions trust,” Carolyn Weinberg, BNY’s chief product and innovation officer, told Bloomberg.
For large , the appeal lies in speed and certainty. Tokenized deposits settle on-chain but retain the credit profile and legal structure of a bank deposit, reducing the counterparty and structural risks that some institutions associate with stablecoins.
Why Are Banks Moving quicker later than the Genius Act?
BNY’s launch comes as U.S. banks step up tokenization efforts following the passage of the Genius Act, which established a and clarified how dollar-backed digital money is treated under U.S. law.
Even though tokenized deposits are distinct from stablecoins, banks view the legislation as removing a major source of uncertainty around blockchain-based money. Clearer rules have made it easier for banks to invest in on-chain settlement and payment systems without fear of abrupt regulatory reversals.
BNY’s leadership has openly discussed this shift. In a CNBC interview later than ahead reports of the bank’s tokenization plans, CEO Robin Vince described digital assets and tokenization as a “megatrend” the bank is attaching itself to. He said regulation, once an obstacle, had turned into a tailwind under the current administration.
Investor Takeaway
How Does BNY Compare With Other Banks?
BNY is entering a space that is rapidly filling with large-bank initiatives. JPMorgan began offering blockchain-based deposit accounts in 2019 and expanded its JPM Coin to more institutional clients last November. This week, the bank said it would issue its deposit token directly on the privacy-focused Canton Network.
HSBC plans to extend its own tokenized deposit service to corporate clients in the U.S. and the United Arab Emirates during the first half of the year. Barclays has taken a diverse route, purchaseing a stake in stablecoin beginup Ubyx to explore tokenized money from the infrastructure side.
While each bank is taking a slightly diverse approach, the underlying goal is the identical: and settlement while keeping money inside regulated systems. Tokenized deposits offer a middle path between legacy rails and stablecoins, giving banks a way to upgrade their infrastructure without changing the nature of deposits themselves.
