Managing over $45 trillion in assets, BNY Mellon’s step reflects not only a pursuit of technological innovation but also an ambition to be among the leading institutions shaping the financial infrastructure of the future.

Why It Matters

BNY Mellon’s research highlights three key trends in the financial sector:

1. RWA (Real-World Asset) tokenization is now seen as a lasting transformation.
2. Blockchain-based deposits are accelerating the digital transformation of traditional banking.
3. Liquidity, speed, and transparency are no longer optional—they are becoming mandatory standards.

According to Bloomberg, the bank aims to increase transaction efficiency, enhance transparency, and test the viability of on-chain financial infrastructures through this project.

Benefits of Tokenized Deposits

BNY Mellon’s model envisions converting traditional bank deposits into digital tokens, offering advantages such as:

• 24/7 transfer capabilities for bank transactions
• Automated interest, payment, and lending processes via smart contracts
• Lower costs for cross-chain asset transfers
• Enhanced liquidity and speed for institutional investors

In short, tokenized deposits represent a blockchain-based evolution of banking.

Blockchain Payments and Stablecoin Integration

BNY Mellon’s research goes beyond deposit tokenization. The bank plans to use stablecoins or proprietary digital payment solutions to make cross-border transactions faster and cheaper. This approach could help blockchain-based alternatives compete with the slow and costly traditional payment systems.

The SEC and the Federal Reserve are increasing scrutiny of tokenized products. Therefore, BNY Mellon must prioritize compliance alongside innovation. Experts suggest that a clear regulatory framework could pave the way for new standards bridging DeFi and traditional finance.

Industry Impact and Future Outlook

This initiative is more than research; it sends a strong signal to the markets. Analysts believe the move could:

• Increase interest in Ethereum-based RWA projects
• Strengthen institutional confidence in tokenized assets

While short-term effects may be limited, in the long run, this initiative could accelerate institutional capital flows into DeFi, redefine banking operations, and create new blockchain-finance paradigms.

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Significant Progress in Crypto Offerings

A status chart shared by River on August 8 tracks these banking giants’ positions in custody and trading services. The snapshot reveals many firms moving from “not yet” into “exploring,” “announced,” or offering restricted access for high-net-worth clients. This trend signals that digital assets are steadily integrating into mainstream wealth management and capital markets.

Concrete Moves by Leading Banks

Tangible actions since early 2024 illustrate this transformation. For example, Morgan Stanley is considering allowing its 15,000 brokers to recommend spot Bitcoin ETFs to clients, while working on suitability guardrails and allocation limits—indicating an expansion beyond unsolicited orders.

More recently, Charles Schwab’s CEO announced plans to enable customers to trade both Bitcoin and Ethereum, aiming to provide a unified platform where all holdings can be viewed and managed.

On the banking side, PNC went further by partnering with Coinbase so that wealth and asset management clients can trade crypto directly through their PNC accounts instead of a separate platform.

Advances in Custody and Tokenization

State Street announced plans to launch stablecoins and tokenize deposits to improve settlement efficiency, with subsequent initiatives expected to tokenize bonds and money market shares.

BNY Mellon frequently appears in filings and product developments, including roles as administrator and cash custodian in ETF documents. The bank has also recently served as custodian for reserves linked to Ripple’s RLUSD stablecoin.

Next-Generation Financial Services and Pilot Projects

Citi has explored Solana for next-gen financial services and tokenization pilots, and reportedly considered custody services in early 2025.

JPMorgan launched several crypto-related projects in 2025. In June, it initiated a pilot for a tokenized deposit token issued on Base, aiming to enable instant dollar transfers.

The bank’s CEO, Jamie Dimon, revealed plans to test stablecoin services alongside the tokenized deposit pilot, though he has not retracted his previous criticisms of crypto.

Last week, JPMorgan enabled its customers to make direct crypto purchases via Coinbase without leaving their dashboard.

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This integration combines U.S. Treasury yields with crypto-based funding and basis arbitrage strategies. It offers investors the opportunity to benefit from traditional Treasury yields while tapping into additional return opportunities.

Tokenized Money Market Funds Move Closer to Crypto

The integrated fund is part of Franklin Templeton’s BENJI product suite and will serve as collateral and a settlement instrument for investment strategies. This enables investors to access Treasury yields while also tapping into alternative revenue sources.

Tokenized money market funds, now a $7 billion asset class, are at the forefront of the latest developments in financial asset tokenization. Global asset manager BlackRock, in collaboration with Securitize, offers solutions backed by short-term U.S. government bonds through its BUIDL token, while BNY Mellon and Goldman Sachs have also launched tokenized funds for institutional investors.

Franklin Templeton was one of the first traditional asset managers to offer tokenized funds on public blockchains. It pioneered this space with the launch of BENJI in 2021.

BounceBit’s Real-World Application

BounceBit has worked with Franklin Templeton to enable the operational use of tokens in active yield strategies. The company’s CEO, Jack Lu, described this collaboration as “the first real-world application of tokenized Treasury assets in active yield strategies.”

“Partnering with Wall Street giants like Franklin Templeton shows that institutional-grade RWA (real-world asset) products have moved beyond experimentation into scalable, usable infrastructure,” Lu said, highlighting the industry’s transformation.

This development follows BounceBit’s earlier pilot using BlackRock’s BUIDL token as collateral for a bitcoin derivatives strategy, which delivered over 20% annualized returns.

BounceBit (BB) Price Outlook

Following the announcement, the price of BounceBit (BB) surged by 2.20% instantly. This rise indicates positive market sentiment and growing investor interest. Innovations like tokenization in the crypto market are key developments boosting confidence in projects like BounceBit.

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BNY will utilize blockchain to maintain a digital mirror of investor share ownership while traditional book-entry systems remain the official ledger.

Transparency Over Tokenization

Unlike BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), these new shares won’t be tokenized. Instead, they will serve as a transparency tool to verify ownership. A minimum $3 million investment is required for institutions to access the digital shares. No ticker symbol or management fee has yet been proposed.

You Might Be Interested In: Elon Musk Talks About the Name of a New Memecoin!

Wall Street Embraces Blockchain Solutions

BlackRock follows in the footsteps of Fidelity, which filed in March to launch an Ethereum-based OnChain share class for the $80 million Fidelity Treasury Digital Fund (FYHXX), expected to go live on May 30 pending regulatory approval.

The market for tokenized Treasury products has grown to $6.16 billion, led by BlackRock’s BUIDL with $2.55 billion, and Franklin Templeton’s BENJI fund managing over $700 million.

Ethereum remains the dominant blockchain for tokenized real-world assets, currently hosting over $4.55 billion, followed by Stellar and Solana with $474.9 million and $274.5 million, respectively.

BlackRock CEO Larry Fink believes tokenization of real-world assets could revolutionize investing.

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In its filing with the SEC, Franklin Templeton announced plans to develop an ETF that tracks the performance of Bitcoin and Ethereum, two leading cryptocurrencies. The fund will use the CF Institutional Digital Asset Index as its benchmark, reflecting the market movements of these two assets.

This ETF will offer investors a convenient way to gain exposure to Bitcoin and Ethereum through a single financial product. To ensure security, BNY Mellon will provide custody services for fiat assets, while Coinbase Custody will safeguard the cryptocurrency holdings.

Franklin Templeton, which currently manages over $1.5 trillion in assets, sees this move as a strategic step in its approach to digital assets. The initiative underscores the growing integration of cryptocurrencies into traditional financial systems.

At this stage, it remains uncertain whether the SEC will approve the filing. However, if approved, the ETF would provide investors with a streamlined method to invest in Bitcoin and Ethereum.

This development is being closely watched by the market and is considered a significant milestone in the broader adoption of cryptocurrencies.

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Blockchain Solutions Tested

The pilot, described in a DTCC report dated May 16, was about the standardization of the way how NAV data of funds is provided across blockchains using Chainlink’s CCIP. The report demonstrated the advantages of delivering structured data on-chain and establishing standard roles and processes.

“The pilot realized that by delivering structured data on-chain and creating standard roles and processes, the foundational data could be embedded into a variety of on-chain use cases like tokenized funds and ‘bulk consumer’ smart contracts,” this is what the report said. These innovations are to help the industry explore and power many downstream applications, such as the brokerage application and more automated data dissemination.

Benefits and Participating Institutions

The pilot managed to create a better automated data management system, almost no impact on the existing market practices, customers could get historical data without manual record-keeping and there were broader API solutions for price data. The U. S. banking firms that participated in the pilot include: American Century Investments, BNY Mellon, Edward Jones, Franklin Templeton, Invesco, JPMorgan, MFS Investment Management, Mid Atlantic Trust, State Street, U.S. Bank.

Market Impact and Future Prospects

DTCC report was followed by Chainlink’s native token, LINK, which jumped 12.5% rise, on a CoinGecko. During the last 12 months LINK has soared by more than 130%, which is such a trend that we witnessed in all cryptos.

BlackRock was the first to release a tokenized money market fund (MMF) on March 19, which is called BUIDL and it runs on the Ethereum network. This fund, that gives native U. S. dollar yields to investors who buy tokens representing shares in the fund which invests in assets like U. S. Treasury bills is available for investment now! The “digital liquidity fund” is the name of BUIDL which operates as an ERC-20 token on the Ethereum blockchain.

The end of the Smart NAV Pilot program is a big step towards combining traditional finance and blockchain technology. Through the partnership with top banking companies, DTCC and Chainlink have created a way for more secure, efficient and transparent financial systems to be built. The industry is still looking into these developments and the chances of using blockchain-based solutions in traditional finance are becoming more and more.

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