Key Takeaways
- • BNY Mellon is moving its transfer agency business—which services $8.6 trillion in assets across 7.6 million accounts—onto blockchain infrastructure to create a single on-chain ownership ledger and eliminate reliance on multiple intermediaries.
- • The blockchain-based transfer agency will initially support major clients including Baillie Gifford, BlackRock, and BNY's Dreyfus unit, with the first fully native U.K.-regulated tokenized fund among planned tokenized products.
- • BNY will maintain its existing traditional systems in parallel with blockchain infrastructure, recognizing that trillions of dollars in fund assets will continue operating on traditional rails for years amid cyber and smart-contract risk considerations.
- • The initiative represents a modernization of core record-keeping functions across fund transactions, positioning BNY—which holds over $59 trillion in assets under custody and administration—at the forefront of Wall Street's infrastructure build-out for tokenized assets.
Summary
BNY Mellon, the world's largest custodian bank, is transitioning one of its core record-keeping functions onto blockchain technology to support the industry's growing shift toward tokenized funds and digital assets. The bank is moving its transfer agency business—which currently services approximately $8.6 trillion in assets spread across 7.6 million accounts—from traditional systems to blockchain-based infrastructure. This move creates a single on-chain ownership record, eliminating the need for multiple intermediaries in the fund transaction process.
According to Carolyn Weinberg, BNY's chief product and innovation officer, the initiative represents a modernization effort: "We think of BNY as modernizing a function that sits behind every single fund transaction by bringing the books and records onchain." The blockchain-based transfer agency will initially serve prominent clients including Baillie Gifford, BlackRock, and BNY's own Dreyfus asset management unit. These clients are expected to launch tokenized fund products on the new infrastructure, including what is described as the first fully native U.K.-regulated tokenized fund.
Reflecting the banking sector's cautious approach to digital asset infrastructure, BNY plans to operate both traditional and blockchain-based systems in parallel for the foreseeable future. Emily Portney, BNY's global head of asset servicing (the bank's largest business division), acknowledged this hybrid approach: "We fully recognize you've got trillions and trillions of dollars' worth of funds that will continue to exist on traditional rails." This coexistence strategy reflects ongoing industry concerns regarding cybersecurity risks and smart-contract vulnerabilities, which remain material considerations as Wall Street builds out tokenized asset infrastructure.
The development underscores BNY Mellon's positioning within the broader institutional push toward tokenized financial infrastructure. With over $59 trillion in assets under custody and administration, BNY's adoption of blockchain-based record-keeping signals institutional-grade infrastructure is maturing for digital assets, though traditional settlement and custody mechanisms will likely persist as a parallel backbone for years.
According to Carolyn Weinberg, BNY's chief product and innovation officer, the initiative represents a modernization effort: "We think of BNY as modernizing a function that sits behind every single fund transaction by bringing the books and records onchain." The blockchain-based transfer agency will initially serve prominent clients including Baillie Gifford, BlackRock, and BNY's own Dreyfus asset management unit. These clients are expected to launch tokenized fund products on the new infrastructure, including what is described as the first fully native U.K.-regulated tokenized fund.
Reflecting the banking sector's cautious approach to digital asset infrastructure, BNY plans to operate both traditional and blockchain-based systems in parallel for the foreseeable future. Emily Portney, BNY's global head of asset servicing (the bank's largest business division), acknowledged this hybrid approach: "We fully recognize you've got trillions and trillions of dollars' worth of funds that will continue to exist on traditional rails." This coexistence strategy reflects ongoing industry concerns regarding cybersecurity risks and smart-contract vulnerabilities, which remain material considerations as Wall Street builds out tokenized asset infrastructure.
The development underscores BNY Mellon's positioning within the broader institutional push toward tokenized financial infrastructure. With over $59 trillion in assets under custody and administration, BNY's adoption of blockchain-based record-keeping signals institutional-grade infrastructure is maturing for digital assets, though traditional settlement and custody mechanisms will likely persist as a parallel backbone for years.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.