BNY Mellon, the world’s largest custodian bank safeguarding over $59 trillion in client assets, is launching a digital transfer agency platform using blockchain technology to record fund transactions and ownership on a shared ledger. Baillie Gifford will become the first client to use this infrastructure for a UK-regulated tokenized fund, while BNY’s Dreyfus division and BlackRock are also expected to launch funds on the same platform. The bank states that blockchain will modernize investment fund record-keeping systems by reducing intermediaries, accelerating settlement and enabling round-the-clock trading. Executives from both BNY and Baillie Gifford emphasized that blockchain creates a shared source of truth eliminating extensive reconciliation between financial institutions, though they caution that legacy systems will persist alongside blockchain for years and highlighted cybersecurity risks associated with smart contracts and blockchain bridges.
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