NEW YORK — BNY Mellon has launched blockchain-based ownership records for tokenized funds, targeting the $8.6 trillion transfer agency market. The system runs alongside existing infrastructure, creating a digital ledger for asset ownership that cuts settlement times for institutional clients moving high volumes.
The implementation assigns each fund unit as a token on a chosen protocol, enabling real-time verification of unit holders. That shift—from traditional batch processing to continuous, atomic settlements—cuts counterparty risk and operational overhead. On-chain data provides transparent auditability, a direct advantage for regulatory compliance.
By tokenizing fund units, BNY Mellon opens the door to fractional ownership and programmable features conventional shares cannot support: automated dividend distributions, on-chain voting rights and access to private markets for qualified investors. Lower fees and faster access to capital follow from that architecture.
The bank has not disclosed which fund partners are using the new system. Future announcements are expected to identify the initial tokenized funds and the protocols supporting their on-chain records—whether Ethereum-based standards or private enterprise blockchains. Adoption rates and transaction cost reductions will determine how quickly rival custodians are forced to respond.
