BNY Mellon Adds Blockchain to Transfer Agency Business

BNY Mellon is expanding its digital asset services by adding blockchain technology to its transfer agency business. The bank has been gradually increasing its involvement in the crypto space, starting with custody services for Bitcoin (BTC) and Ethereum (ETH), as well as support for USDC stablecoins.

The new platform will use blockchain to process fund transactions and maintain shareholder records on-chain, creating a shared ownership ledger for tokenized funds. This move is expected to reduce repeated checks between intermediaries that support fund administration, making the process more efficient.

According to BNY Mellon's Chief Product and Innovation Officer Carolyn Weinberg, the bank is 'modernizing a function behind fund transactions by bringing the “books and records onchain.”' The platform will give asset managers a digital record of ownership for tokenized products, which can hold traditional assets while investor ownership is recorded through blockchain-based tokens.

BNY Mellon expects traditional systems to remain active for years, with Global Head of Asset Servicing Emily Portney stating that 'trillions and trillions of dollars' in funds will continue using existing rails. However, the bank is positioning itself at the forefront of the growing market for tokenized funds by launching a fully native U.K.-regulated tokenized fund for Baillie Gifford.

The bank's Dreyfus division and BlackRock are also expected to use the same infrastructure for planned tokenized products. BNY Mellon is also preparing to tokenize U.S. Treasuries and pilot transactions on its private blockchain before the end of 2026, with after-hours Treasury transactions already executed earlier this year using stablecoin issuers.