BNY, one of the world’s largest custodian banks, is moving a core part of its business onto blockchain infrastructure. According to a Financial Times report published Thursday, the bank will bring its transfer agency services onchain, positioning itself within the infrastructure taking shape on Wall Street for tokenized funds.
For BNY, which oversees more than $59 trillion in assets under custody and administration, this represents far more than a routine technology upgrade. Carolyn Weinberg, the company’s chief product and innovation officer, said the bank is modernizing a function that sits behind every fund transaction, with the goal of recording ownership directly onchain.
Millions of accounts, one ownership record
The scale of the project becomes clearer when considering that the 242-year-old bank services $8.6 trillion in assets across 7.6 million accounts. Today, information about who owns a fund and how much they hold is often stored separately across multiple systems. This structure requires constant reconciliation, adding both time and cost to transactions.
By moving transfer agency services to blockchain, BNY plans to create a single record of ownership and reduce the number of intermediaries involved in the process.
Emily Portney, global head of asset servicing at BNY, highlighted the more realistic side of the transition. She acknowledged that trillions of dollars in fund assets will remain on traditional financial rails for a long time. The shift, therefore, will take place gradually rather than overnight.
The first clients have been identified
Baillie Gifford, which manages more than $261 billion in assets, is among the first institutions expected to use the system. The companies describe the project as the first fully domestically regulated tokenized fund in the United Kingdom.
BlackRock and Dreyfus, BNY’s money market and cash management division, are also expected to use the infrastructure for planned funds.
Tokenized money market funds are not a new concept. Major asset managers such as BlackRock and Franklin Templeton have already launched similar products in recent years. These funds hold cash and short-term debt instruments, while issuing ownership shares in the form of blockchain-based tokens.
The trend extends beyond BNY
Edwin Mata, CEO of tokenization platform Brickken, expects Wall Street to operate entirely on blockchain infrastructure by 2030. Other developments across the banking industry also point in this direction.
Some of the largest US banks, including JPMorgan, Citi and Bank of America, reportedly plan to establish a shared tokenized deposit network by the first half of 2027. The initiative comes as banks assess the potential threat that stablecoins could pose to traditional deposits.
BNY does not expect legacy systems to disappear immediately. The bank will continue operating its traditional transfer agency infrastructure alongside the blockchain-based system.
The transition also carries clear risks. Errors in smart contracts, vulnerabilities in bridges connecting different blockchain networks and broader cybersecurity concerns could complicate the adoption process.
BNY is betting that a single blockchain-based ownership ledger can eliminate some of the reconciliation work that still creates significant costs in fund administration. The speed of that transformation will depend on how smoothly blockchain infrastructure can operate alongside traditional financial systems.
