BNY to put transfer agency records on blockchain

BNY will introduce a blockchain-based transfer agency that records fund ownership and investor transactions on a shared ledger while maintaining its existing transfer agency operations. Early participants include Baillie Gifford, with BlackRock and BNY Dreyfus expected to use the platform for tokenized offerings.

The new digital transfer agency will carry out the same core duties as conventional transfer agents: processing investor transactions, issuing and redeeming fund shares, and updating ownership records. Those activities will be recorded on a shared blockchain ledger intended to reduce the need for separate record-keeping and frequent reconciliation among fund managers, custodians and administrators.

Carolyn Weinberg, BNY’s chief product and innovation officer, described the project as ‘modernizing a function that sits behind every single fund transaction by bringing the books and records on-chain.’ BNY plans to operate the blockchain platform alongside its legacy transfer agency services rather than replacing them immediately.

BNY’s transfer agency business currently covers roughly $8.6 trillion in assets across about 7.6 million accounts. The bank oversees more than $59 trillion in assets under custody and administration.

Edinburgh-based Baillie Gifford intends to use the platform for what it calls a fully native United Kingdom-regulated tokenized fund. Theo Golden, head of digital assets at Baillie Gifford, described the on-chain record as ‘a source of truth’ for participants dealing with the asset. BlackRock and BNY Dreyfus’ money market and cash management business are also expected to use the service for upcoming tokenized products.

BNY has not disclosed which blockchain network will host the platform. The bank has been expanding its digital asset capabilities in Europe and engaging with regulatory frameworks including the EU’s Markets in Crypto-Assets rules as it prepares for broader institutional adoption of tokenized funds and related on-chain infrastructure.

Transfer agent records normally sit in separate systems used by different market participants, requiring frequent reconciliation to make sure records match. Recording ownership and transaction data on a shared ledger is intended to provide a single, agreed record for all participants and to streamline reconciliation.

BNY did not provide a timeline for a full rollout or announce additional clients beyond early users. The bank’s strategy leaves traditional transfer agency services in place while offering an on-chain option for clients that want to pilot tokenized products or move specific funds onto a digital ledger.