- BNY Mellon has launched Digital Asset Data Insights, publishing custodial asset data directly to blockchains, starting with BlackRock‘s BUIDL fund.
- This on-chain data publication offers superior transparency compared to traditional proof of reserves methods for tokenized assets.
- BNY Mellon was the first major global custodian in digital assets and recently received an SEC exception from the SAB 121 crypto accounting rule.
The Bank of New York Mellon Corporation (BNY) has launched a new product called Digital Asset Data Insights that publishes custodial asset information directly to public blockchains. This development marks a significant advancement in financial transparency, as the world’s largest global custodian will now feed verified data about assets under its administration directly to blockchain networks, beginning with Ethereum.
The innovation addresses a critical need in the digital asset space, particularly for real world asset (RWA) tokenization where tokens represent assets held outside a blockchain. BNY’s system provides more reliable verification than traditional “proof of reserves” methods, which have been criticized for vulnerability to manipulation.
“Accessing transparent data is critical to our clients’ success in today’s market,” said Caroline Butler, Global Head of Digital Assets at BNY. “Our platform’s support of Digital Asset Data Insights underscores our commitment to servicing the end-to-end asset lifecycle via distributed ledger technology, while maintaining data integrity from a trusted source.”
BlackRock’s BUIDL Fund Leads Implementation
The first implementation of this data service supports BlackRock’s BUIDL on-chain money market fund, which has seen its market capitalization approach $2 billion after tripling in the past month. This rapid growth stems from BUIDL’s use as collateral for Ethena’s new USDtb stablecoin, which has added $1.3 billion in BUIDL holdings during this period.
BNY’s solution improves on existing verification methods in several ways. Unlike PDF reports that could potentially be altered, this data comes directly from the custodian itself. Being published on-chain means the information can be cryptographically signed and verified. Additionally, the data can be utilized programmatically by other smart contracts.
Expanding Digital Asset Capabilities
BNY Mellon established itself in the digital asset space four years ago by investing in Fireblocks. While the bank has been active in various distributed ledger technology initiatives, its progress in crypto custody was previously hindered by the SEC’s SAB 121 accounting rule, which made crypto custody prohibitively expensive for banks.
Recently, BNY became the first institution granted an exception to this rule by the SEC. With the subsequent rescinding of SAB 121 by the new SEC Acting Chair, the bank now faces expanded opportunities in the digital asset custody space.
This development represents a significant step forward for transparency in tokenized real-world assets, offering verification that is more reliable, timely, and automated than previous industry standards.
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