BNY Mellon is introducing a new digital service to track fund activity and who owns shares using blockchain technology. Early adopters of this system will likely include major investment firms like Baillie Gifford, BlackRock, and BNY’s own Dreyfus division.
Key Takeaways
- BNY is launching an onchain transfer agency covering $8.6T across 7.6M investor accounts.
- Blackrock and Baillie Gifford could scale tokenized funds through BNY’s $59T custody network.
- BNY will run 2 systems in parallel as institutions test blockchain settlement and compliance.
Baillie Gifford to Use BNY Platform for UK’s First Native Regulated Tokenized Fund
BNY Mellon, a major financial institution, is starting to use blockchain technology for a key behind-the-scenes process on Wall Street.
The world’s largest custodian plans to launch a digital version of its transfer agency business. The platform will process fund transactions and maintain records showing who owns each share. BNY will keep its traditional system running alongside the new service, according to the report by the Financial Times.
The move carries significant weight. BNY oversees more than $59 trillion in assets under custody and administration. Its transfer agency operation alone services about $8.6 trillion across 7.6 million investor accounts.
Tokenized Funds Gain Institutional Infrastructure
Transfer agents handle everything related to buying into funds (subscriptions), selling out of them (redemptions), and keeping track of who owns shares. This usually involves multiple organizations managing and comparing their own records, which can be complex.
BNY’s blockchain technology aims to establish a single, shared source of truth for who owns what. This can help eliminate redundant processes, speed up transactions, and enable markets to function 24/7.
Carolyn Weinberg, head of product and innovation at BNY Mellon, believes this technology has the potential to revolutionize financial transaction processing. She explained that the project involves recording fund activity data directly on a blockchain.
Investment firm Baillie Gifford, which manages around $262 billion, is launching what it believes to be the UK’s first fully digital and regulated fund using a new system for transferring ownership.
Blackrock and Dreyfus, BNY’s money-market fund and cash-management business, are also expected to use the service for planned products.
BNY Chooses Evolution Over Disruption
This new offering shows increasing enthusiasm on Wall Street for turning assets into digital tokens. Fund managers believe blockchain technology could simplify issuing, transferring, and finalizing fund ownership—all without altering how those funds are actually invested.
BNY has already worked with Goldman Sachs on a system that records ownership of selected money-market funds through blockchain-based representations. The new transfer agency extends that strategy deeper into BNY’s core infrastructure.
Traditional financial systems aren’t going away anytime soon. BNY predicts that both these established methods and newer blockchain technologies will likely be used side-by-side as companies evaluate their safety, how they’re regulated, and whether there’s enough interest from the market.
This careful strategy could be crucial. While financial companies are attracted to the benefits of shared ledgers, they also require reliable safeguards for protecting assets, adhering to regulations, and maintaining accurate records.
BNY doesn’t aim to disrupt the existing fund industry immediately. Instead, they want to stay a central player as ownership information transitions to blockchain technology.
2026-07-29 22:58