BNY launches on-chain transfer agency for tokenized funds

BNY has launched a blockchain-based Digital Transfer Agency to record and service funds that are issued natively on a blockchain. The service is rolling out to select clients in the US and the UK, with BNY Investments Dreyfus, Baillie Gifford and BlackRock among the initial issuers. BNY is offering the digital service alongside its existing physical transfer agent operations.

The Digital Transfer Agency records legal title and economic ownership directly on-chain instead of using mirror-token or “digital twin” arrangements. BNY said the on-chain books and records provide a single authoritative ledger of fund activity and allow direct asset transfers between holders.

The service supports subscriptions and redemptions in both fiat and stablecoins, using mint and burn capabilities built into BNY’s ecosystem. Those functions are designed to enable on-chain asset flows and peer-to-peer transfers while preserving operational controls and record keeping within the bank’s infrastructure.

BNY described the digital offering as an extension of its transfer agency business rather than a replacement. The bank’s traditional transfer agent services cover about $8.6 trillion in assets across more than 7.6 million accounts, a capacity it expects to use for clients launching both conventional and tokenized fund structures.

Carolyn Weinberg, BNY’s chief product and innovation officer, characterized the capabilities as combining the operational rigor, transparency and trust of traditional fund services with interoperability for digital markets.

BNY noted the rollout follows demand from fund managers for tools to issue and operate digitally native investment products. The bank added the Digital Transfer Agency will be available in addition to its physical transfer agent services so clients can choose structures that match their regulatory and operational needs.