US bank BNY (Bank of New York Mellon) is adopting blockchain technology to manage books and records for fund transactions. The Financial Times reported on the bank's blockchain-based transfer agency platform.
The 242-year-old financial services giant holds more than $59 trillion in assets under custody and administration. Its transfer agent services currently cover approximately $8.6 trillion in assets across 7.6 million accounts.
Early adopters and industry context
UK-based asset manager Baillie Gifford, with over $261 billion under management, will use BNY's blockchain transfer agency for the first fully UK-regulated tokenized fund. BlackRock and BNY's money-market business Dreyfus are expected to use the service for planned tokenized funds.
BlackRock, Franklin Templeton and other asset managers have launched tokenized money-market funds that issue ownership interests as blockchain tokens. BNY's move to bring transfer agency records onchain reportedly follows its European regulatory progress under the EU's Markets in Crypto-Assets (MiCA) framework.
Traditional rails and risks
BNY will maintain its traditional transfer agent operations alongside the new blockchain-based platform. The bank has not disclosed which blockchain network will support the new platform.
Blockchain-based systems carry cyber risks including bugs in smart contracts and bridges linking networks. Major US banks including JPMorgan, Citi and Bank of America plan to build a shared tokenized deposit network by the first half of 2027.