BNY Launches Onchain Transfer Agency for Its $8.6 Trillion Fund Business

BNY Mellon is launching a digital transfer agency that will record fund transactions and investor ownership onchain. Baillie Gifford, Blackrock and BNY’s Dreyfus unit are expected to be among its first users.

BNY (Bank of New York) Mellon is putting one of Wall Street’s least visible but most important functions on blockchain rails.

Transfer agents sit behind fund subscriptions, redemptions and ownership records. These processes often require several parties to maintain and reconcile separate databases.

BNY’s blockchain platform is designed to create a shared record of ownership. That could reduce duplication, shorten settlement times and support markets that operate around the clock.

Carolyn Weinberg, BNY’s chief product and innovation officer, said the technology could transform how financial markets process transactions. She described the project as bringing the records behind fund activity onchain.

Baillie Gifford is using the digital transfer agent for what it calls the UK’s first fully native, regulated tokenized fund. The Edinburgh-based investment firm manages about $262 billion (£197 billion).

The launch reflects Wall Street’s growing interest in tokenization. Asset managers hope blockchain can make fund shares easier to issue, transfer and settle without changing the underlying investment structure.

However, traditional financial rails are unlikely to disappear soon. BNY expects conventional and blockchain systems to operate together while institutions test security, regulation and market demand.

That measured approach may prove important. Financial firms want the efficiency of a shared ledger, but they still need established controls for custody, compliance and record-keeping.

For BNY, the goal is not to replace the fund industry overnight. It is to ensure that the bank remains at its center as ownership records move onchain.