BNY adds blockchain recordkeeping to institutional fund services

BNY has expanded its blockchain strategy by bringing the ownership records behind investment funds onchain through a new digital transfer agency platform for institutional clients.

The Financial Times reported that the New York-based custodian bank will launch a blockchain-enabled version of its transfer agency business, allowing fund ownership records and investor transactions to be maintained on a shared digital ledger while continuing to operate its existing transfer agency services.

BNY has moved fund ownership records onto blockchain

Rather than tokenizing only investment products, BNY is applying blockchain technology to the record-keeping infrastructure that supports fund operations. According to the Financial Times, the platform will keep official ownership records onchain, creating a shared source of information for participants involved in fund administration.

Carolyn Weinberg, BNY’s chief product and innovation officer, told the publication that the project modernizes the books and records supporting fund transactions by moving them onto blockchain infrastructure.

Transfer agents maintain official records of fund investors, process subscriptions and redemptions, update shareholder registers and support communications between funds and investors. Those records are usually spread across systems operated by fund managers, custodians and administrators, making regular reconciliation necessary.

By placing the records on a shared ledger, BNY intends to reduce the need for separate databases while giving authorized participants access to the same source of ownership information.

According to the report, BNY’s transfer agency business supports approximately $8.6 trillion in assets across 7.6 million investor accounts. The bank separately oversees more than $59 trillion in assets under custody and administration.

Early tokenized funds are already using the platform

Among the first institutions adopting the platform is Edinburgh-based asset manager Baillie Gifford, which plans to use it for what the firm described as the United Kingdom’s first fully native regulated tokenized fund.

“What we have in the blockchain is a shared source of record-keeping between the participants. We agree that this is the source of truth when people are dealing with the asset that this is monitoring,” Theo Golden, Baillie Gifford’s head of digital assets, said. 

The report also said BlackRock and BNY Dreyfus’ money market fund and cash management business are expected to use the platform for future tokenized fund offerings.

According to Baillie Gifford’s website, the firm manages roughly $261 billion in assets.

BNY has not identified the blockchain network that will power the new platform. Cointelegraph said it contacted the bank for comment but did not receive a response before publication.

Digital asset work has continued across custody and regulation

The transfer agency launch builds on several digital asset initiatives introduced by BNY over recent months.

In June, the bank added USDC minting, redemption, custody and transfer capabilities to its Digital Asset Custody platform, giving institutional clients direct access to Circle’s stablecoin through BNY’s infrastructure. 

The bank already serves as the primary custodian for the assets backing USDC, and the rollout extended its role beyond reserve custody into operational stablecoin services.

At the time, BNY said USDC was the first stablecoin supported on its custody platform and that additional stablecoins and digital cash workflows would follow. 

The announcement also came after the bank partnered with Abu Dhabi-based Finstreet and the ADI Foundation to develop institutional custody services for Bitcoin and Ether, with plans to later include stablecoins and tokenized real-world assets.

MiCA approval has added another regulated digital asset business

The latest blockchain initiative also follows BNY’s regulatory expansion in Europe.

Earlier in the week, the European Securities and Markets Authority added BNY SA/NV, the bank’s Belgian subsidiary, to its interim Markets in Crypto-Assets register after authorization from the National Bank of Belgium. The approval allows the subsidiary to provide crypto-asset custody and transfer services under the European Union’s MiCA framework.

The authorization placed BNY alongside other banks and financial institutions expanding regulated digital asset operations across Europe as more firms complete the licensing process following MiCA’s transition deadline.

BNY’s recent announcements show the bank extending blockchain technology across several layers of institutional financial infrastructure, including regulated crypto custody, stablecoin services and the operational record-keeping systems that support tokenized investment funds.