Institutional clients gain onchain cash tools as markets move toward always-on settlement
A major global custodian has taken a significant step into blockchain-based finance with the launch of tokenized bank deposits for institutional clients. The initiative reflects a broader shift across traditional finance toward onchain infrastructure designed to support faster settlement, improved liquidity management and round-the-clock market operations.
The newly launched service allows institutional clients to hold onchain representations of bank deposits, issued on a permissioned blockchain network operated internally. These tokenized deposits function as digital claims on cash balances, enabling more efficient use of capital while maintaining the regulatory safeguards of the traditional banking system.
Initially, the deposits are designed to support collateral and margin requirements, with plans to expand functionality over time.
Why Traditional Finance Is Turning to Blockchain
Legacy financial systems depend on multiple intermediaries and limited operating hours, often delaying settlement and increasing costs. Blockchain technology addresses these inefficiencies by offering continuous availability, greater transparency and faster settlement finality. For institutional participants, this infrastructure helps unlock liquidity that would otherwise remain idle during off-market hours.
Regulators have acknowledged the growing relevance of 24/7 financial markets, noting that extended trading hours could better align with a global, digital economy. While not all asset clsses are suited for continuous trading, real-world asset tokenization is increasingly viewed as a practical path toward always-on settlement for select markets.
As banks modernize core infrastructure, tokenized deposits and real-world assets are emerging as foundational tools for the next phase of institutional finance, bridging traditional systems with blockchain-based efficiency.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.