BNY, one of the world’s oldest and largest financial institutions, is accelerating the adoption of blockchain technology in traditional finance by introducing a digital version of its transfe
BNY, one of the world’s oldest and largest financial institutions, is accelerating the adoption of blockchain technology in traditional finance by introducing a digital version of its transfer agency service. The initiative places one of Wall Street’s most essential recordkeeping functions on a blockchain platform, combining BNY’s legacy infrastructure with modern digital solutions.
The transfer agency function, crucial to investment fund operations, is responsible for maintaining official shareholder records, processing investor transactions, and ensuring that asset ownership information remains accurate and up to date. Historically, these responsibilities have depended on varied and disconnected software systems, obligating fund managers and custodians to perform frequent reconciliations.
BNY will now operate its blockchain-powered transfer agency platform alongside its existing traditional service. The bank, with more than $59 trillion in assets under custody and administration, manages over $8.6 trillion for 7.6 million clients through its transfer agency business. This marks one of the largest blockchain implementations in the global financial industry.
Carolyn Weinberg, Chief Product and Innovation Officer at BNY, suggested that the deployment of blockchain to digitize book and record-keeping could transform transaction processes for investment funds by streamlining efficiency and bolstering transparency.
Digitizing book and record information using blockchain brings efficiency and transparency to fund transactions, potentially changing how asset managers operate.
This move is part of BNY’s broader digital asset expansion, which has seen advancements in regulatory support such as the European Union’s Markets in Crypto-Assets (MiCA) framework.
The blockchain platform will initially cater to the bank’s largest institutional clients. One key participant, Baillie Gifford, a well-established Scottish investment management firm with over $261 billion in assets under management, plans to leverage the service to launch what it describes as the first native, UK-regulated tokenized fund.
Mini dictionary: Baillie Gifford is an independent investment manager based in Edinburgh, known for its long-term growth investment strategies and managing multi-billion-dollar portfolios for institutional and retail clients around the world.
In addition to Baillie Gifford, BlackRock and Dreyfus at BNY have indicated readiness to launch new investment offerings through the digital transfer agency. These moves signal a growing industry trend, building on earlier tokenization experiments executed by companies like Franklin Templeton.
Theo Golden, Digital Assets lead at Baillie Gifford, pointed out that utilizing blockchain as a single, immutable ledger for market participants improves record accuracy, cuts reconciliation costs, and paves the way for operational efficiencies across the financial sector.
With a shared ledger based on blockchain, all market parties have immediate access to up-to-date asset ownership information, significantly reducing reconciliation efforts.
Asset managers envision blockchain as a tool for faster settlement times, lower daily operational expenses, and the capability to keep financial markets running continuously. Jenny Johnson, CEO of Franklin Templeton, echoed this perspective, stating that reconciliations between systems represent a significant expense that can be minimized through real-time updates on a blockchain ledger.
Looking ahead, Edwin Mata, Chief Executive Officer of the tokenization platform Brickken, expects a substantial portion of Wall Street activity to be blockchain-based by 2030. Major US banks, including JPMorgan, Citi, and Bank of America, are also developing tokenized deposit systems targeting rollout by 2027.
The transition to blockchain infrastructure does not signal an immediate end for traditional recordkeeping, but BNY’s decision reflects the growing mainstream acceptance of tokenized processes in institutional finance. Industry participants will now observe whether the actual benefits of blockchain—especially in terms of transparency and settlement speed—will set the new standard for capital market operations.
InstitutionRole in Blockchain Transfer AgencyAssets Under ManagementTokenized Fund LaunchBNYPlatform provider & administrator$59 trillion (custody); $8.6 trillion (agency)Yes (blockchain service)Baillie GiffordInvestor & early adopter$261 billionYes (first UK-regulated fund)BlackRock, DreyfusPlanned participantsNot disclosedYes (digital products upcoming)Franklin TempletonExperienced with tokenized fundsNot disclosedYes (earlier projects)The post BNY launches blockchain-based transfer agency, expands tokenized fund services appeared first on COINTURK NEWS.
