BNY launches digital transfer agent for tokenized funds: FT

BNY, the world's largest custodian bank with over $59 trillion in assets, is launching a digital transfer agency platform to process fund transactions and maintain shareholder records on-chain. This initiative marks a significant shift for the bank as it integrates blockchain technology into its core operations to run alongside traditional financial infrastructure. By utilizing a shared ledger, the platform aims to reduce intermediaries, accelerate settlement times, and enable round-the-clock trading for investment funds. Baillie Gifford is set to be the first client to utilize this infrastructure for a fully native, UK-regulated tokenized fund. Additionally, BNY’s Dreyfus division and BlackRock are expected to launch funds using the same blockchain-based system. Executives emphasize that this shared source of truth will drastically reduce the reconciliation burdens typically faced by financial institutions. While the move signals a major institutional adoption of tokenization, the bank acknowledges that legacy systems will remain in place for years while addressing cybersecurity risks related to smart contracts and bridges.