BNY, one of the world’s largest custodian banks, is taking a major step toward blockchain-based financial infrastructure by moving fund ownership records onto the chain.
The New York-based institution will launch a blockchain-based version of its transfer agency business, which manages fund ownership records and investor transactions, the Financial Times reported. reported Wednesday.
“We believe BNY is modernizing a function that sits behind every funds transaction by putting the books and records on-chain,” Carolyn Weinberg, BNY’s head of product and innovation, was quoted as saying.
The move follows BNY’s broader digital asset expansion, including its progress on European regulation under the EU Markets in Crypto-Asset (MiCA), as the bank positions itself for the next phase of institutional blockchain adoption.
What are transfer agency records?
Transfer agents are financial service providers who keep official records of who owns shares in investment funds. They manage tasks such as processing investor transactions, issuing and redeeming fund shares, updating ownership records, and supporting communication between funds and investors.
These records are part of the behind-the-scenes infrastructure that allows investment funds to operate. Traditionally, ownership information is stored in multiple systems used by fund managers, custodians and other market participants, requiring frequent reconciliation.
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According to the report, BNY’s transfer agent services cover approximately $8.6 trillion in assets across 7.6 million accounts. The company, which oversees more than $59 trillion in assets under custody and administration, would maintain its traditional wire agency operations alongside the new digital platform.
Baillie Gifford among the first users of tokenized funds
By moving transfer agency records onto the chain, BNY aims to create a shared source of information for market participants, reducing the reliance on separate databases and manual reconciliation processes.
Early adopters of BNY’s digital remittance agency reportedly include Edinburgh, Scotland-based asset manager Baillie Gifford, which plans to use the platform for what it described as the first “fully native” tokenized fund regulated in the UK. Money market funds and cash management businesses BlackRock and BNY Dreyfus are also expected to use the service for upcoming tokenized funds.
The company manages approximately $261 billion in assets, according to its website.
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“What we have in blockchain is a shared source of recordkeeping between participants,” said Theo Golden, head of digital assets at Baillie Gifford. “We agree that this is the source of truth when people are dealing with the assets being monitored,” the executive said.
BNY has not revealed which blockchain network will support the new platform. Cointelegraph reached out to the company for comment on the report but did not receive a response at the time of publication.
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