BNY, the largest custodian bank, will issue digital representations of deposits on the blockchain. The move aims to enhance the ability to transfer “programmable, on-chain cash” using the bank’s private blockchain. The product targets institutions and digital natives, offering tokenized deposits for withdrawal through traditional means.

Wall Street is increasingly utilizing digital assets to enhance operations. BNY’s tokenized deposits aim to reduce settlement friction and improve liquidity efficiency. Client balances will be recorded on-chain but maintained with traditional systems for compliance. BNY safeguards $57.8 trillion in assets and manages $2.1 trillion in assets.

Expanding on tokenized deposits, BNY’s product will serve as a crucial component in its digital infrastructure. The bank previously unveiled a tokenized money-market fund with Goldman Sachs. BNY formed a digital assets unit in 2021 and offers custody services for Bitcoin and Ethereum.

BNY’s blog post featured statements from crypto-native firms like Anchorage Digital, Circle, Paxos, Securitize, and Ripple Prime. Anchorage Digital’s CEO praised BNY’s move to enable tokenized deposits as a landmark for digital cash adoption. Citadel Securities, accounting for 25% of U.S. equity volume, emphasized the importance of tokenization for the future of finance. CEO Ken Griffin has previously expressed concerns about crypto’s impact on the U.S. dollar.

Read more at Yahoo Finance: BNY Debuts Tokenized Deposits for Institutions and ‘Digital Natives’