BNY Mellon is rolling out a digital transfer agency that will record fund transactions and investor ownership directly on a blockchain. The bank's fund business, which oversees $8.6 trillion in assets, expects Baillie Gifford, BlackRock, and its own Dreyfus unit to be among the first users. Baillie Gifford plans to use the platform for the UK's first native regulated tokenized fund.
Why an onchain transfer agency?
Transfer agencies are the back-office backbone of the fund industry, tracking who owns what and processing trades. By moving this record-keeping onto a blockchain, BNY Mellon aims to reduce reconciliation delays and give investors a single, tamper-resistant view of their holdings. The bank says the system will support both traditional and tokenized funds, bridging the gap between conventional finance and digital assets.
First users and the tokenized fund
Baillie Gifford, a Scottish investment firm with a long history in growth equities, will be the first to launch a regulated tokenized fund on the platform. That fund will be native to the UK market, meaning it's created and managed onchain from the start, not a traditional fund wrapped in a token. BlackRock and BNY's Dreyfus unit are also expected to adopt the service, though they haven't specified which funds they'll tokenize.
BNY Mellon's move comes as asset managers increasingly explore blockchain for efficiency gains. The bank already offers digital custody services for crypto assets and has been testing tokenized deposits. This transfer agency is its most direct play in fund tokenization yet.
What the platform does
The digital transfer agency will record fund subscriptions, redemptions, and investor ownership on a permissioned blockchain. That means only authorized participants — like fund managers, custodians, and regulators — can view or update the ledger. BNY Mellon says the system will integrate with existing market infrastructure, so fund distributors and investors won't need to change their workflows overnight.
The bank is positioning the service as a way to reduce operational risk. In traditional fund processing, multiple parties maintain separate records, leading to mismatches and manual fixes. A shared onchain record could eliminate those discrepancies.
Baillie Gifford's tokenized fund is expected to launch in the coming months, pending regulatory approval from the UK's Financial Conduct Authority. BNY Mellon hasn't set a public date for the transfer agency's full rollout, but the first users are already lined up. The question now is how quickly other asset managers follow.
