BNY Mellon, America’s oldest running bank, has further solidified its presence in the blockchain space by unveiling a cutting-edge blockchain accounting tool. The bank’s latest offering has already attracted the attention of BlackRock, the world’s largest asset manager, which has become the inaugural client to leverage this innovative solution.
As reported by Fortune, Bank of New York Mellon (BNY Mellon) has introduced a groundbreaking blockchain-based accounting tool that aims to revolutionize fund accounting by providing real-time insights into tokenized assets.
BlackRock Leads the Way
In a significant development, BlackRock has emerged as the first institution to adopt BNY Mellon’s new blockchain platform. This platform is designed to enhance fund management by enabling the real-time recording and updating of a fund’s net asset value (NAV) directly on a blockchain, thereby eliminating the need for third-party accounting services. By embracing this technology, BNY Mellon is driving transparency and efficiency in fund management.
According to reports, BlackRock plans to integrate this solution into its on-chain money market fund, BUIDL, allowing investors seamless access to real-time financial data.
Caroline Butler, Head of Digital Assets at BNY Mellon, emphasized the significance of this blockchain-powered tool in enhancing visibility and accessibility within the financial ecosystem. She highlighted that this innovation builds on BNY Mellon’s expertise in digital assets, a sector that has witnessed significant growth in recent years.
The move towards tokenizing financial instruments reflects a broader industry trend aimed at improving cost efficiency and operational effectiveness.
Adapting to Regulatory Changes
BNY Mellon has continued to expand its blockchain capabilities despite initial regulatory challenges. In response to stringent balance-sheet requirements imposed by the Securities and Exchange Commission (SEC) under the previous U.S. administration, BNY Mellon faced obstacles in offering crypto asset custody services. However, regulatory exemptions granted in 2024 enabled the bank to resume its crypto custody services, allowing it to hold Bitcoin and Ethereum for exchange-traded products.
With regulatory changes under the current administration, the path towards seamless blockchain adoption in traditional finance has been further smoothed.
The launch of this innovative accounting tool underscores a shift in traditional financial institutions’ approach to integrating blockchain technology. What was once considered volatile and risky, digital assets are now being embraced by industry leaders like BlackRock as a means to modernize fund management. BlackRock’s CEO Larry Fink has even suggested that tokenization could revolutionize the financial landscape.
BNY Mellon’s Ongoing Blockchain Initiatives
BNY Mellon’s venture into blockchain is not a recent development. The bank has been actively exploring digital asset services for several years. In 2022, BNY Mellon launched its Digital Asset Custody Platform, allowing select clients to securely store and transfer Bitcoin and Ethereum.
Prior to that, in 2021, the bank established its Digital Assets Unit, a dedicated division focused on blockchain-based financial solutions. This unit has been instrumental in integrating blockchain technology into various financial services, including trade finance.
Furthermore, BNY Mellon joined the Marco Polo Network in 2021, leveraging distributed ledger technology to streamline global trade operations. Additionally, BNY Mellon Investment Management introduced a Blockchain Innovation Fund in Singapore, offering investors exposure to companies embracing blockchain technology.