Ripple Backs Bank of New York’s Push Into Tokenized Banking

The Bank of New York (BNY) Mellon has launched a tokenized deposit service that allows institutional clients to convert cash into digital tokens.

The initiative brings major crypto players, including Ripple and Circle, onto a private blockchain designed to speed up cash transfers.

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BNY Targets ‘Always-On’ Markets With New Digital Deposit Offering

The new offering allows the bank’s institutional clients to convert traditional cash deposits into digital tokens on a private ledger.

The move aims to modernize financial infrastructure by enabling 24/7 settlement for complex transactions. These include margin management and collateral movement, which often face delays in the traditional banking system.

BNY noted that the service aligns with a global shift toward an “always-on” operating model in financial markets.

According to the firm, institutional investors increasingly need to move assets instantly to capitalize on market opportunities. This urgency applies equally to meeting margin calls outside standard banking hours.

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Tokenized deposits address these needs by reducing settlement friction. They also enable programmable payments, in which transactions execute automatically when specific conditions are met.

Despite the digital interface, BNY emphasized that client balances are still recorded in its traditional systems to ensure regulatory reporting integrity.

This hybrid approach allows the bank to offer blockchain utility while maintaining the safety and compliance standards expected of a global systemically important bank.

Ripple Prime, a subsidiary of blockchain payments firm Ripple, is among the first to utilize the service.

The collaboration deepens the existing relationship between the two firms, as BNY already serves as the primary custodian for the reserves backing Ripple’s RLUSD stablecoin.

By integrating with BNY’s digital ledger, Ripple Prime can manage its cash liquidity with greater flexibility, representing balances on-chain for near-real-time settlement.

In addition to Ripple Prime and Circle, the bank announced a roster of other early participants testing the platform. These include digital asset firms Securitize, Talos, and Paxos, as well as traditional asset managers WisdomTree and Invesco.

Source: https://beincrypto.com/ripple-backs-bny-tokenized-institutional-banking/