America’s oldest bank will commence its custody service for cryptos this week.
BNY Mellon, America’s oldest bank, has announced that it will commence offering custody services for cryptocurrencies alongside traditional financial instruments.
The Wall Street Journal (WSJ) reported today that BNY Mellon would store the required keys to access and transfer digital currencies. Furthermore, the bank will also provide the same bookkeeping services on its crypto assets. The development comes following BNY’s announcement that it has received approval from New York’s financial regulator to enable the traditional financial institution to provide custody services for its clients’ Bitcoin and Ethereum.
Robin Vince, BNY Mellon’s president and chief executive, said: “We are excited to help drive the financial industry forward.”
Growing Acceptance of Cryptos Among Traditional Financial Institutions
BNY Mellon’s move to offer cryptocurrency custody service is a major win for the emerging industry. For years, several financial institutions have distanced themselves from crypto assets due to the enormous risks attached to the asset class and the absence of clearer regulations for the industry.
However, some traditional financial institutions have ignored these concerns and have adopted the tech following calls from their clients, who have continuously shown interest in digital currencies.
Fund managers have relied on BNY Mellon to provide several financial services, including tracking the value of different traditional assets. With the addition of cryptocurrencies, these money managers can conveniently manage all their assets under one platform without relying on a different cryptocurrency specialist.
“BNY Mellon said it is the first of the eight systemically important U.S. banks to store digital currencies and allow customers to use one custody platform for both its traditional and crypto holdings,” the WSJ report noted.
BNY Mellon’s Crypto Service Offerings
It is noteworthy that BNY Mellon first indicated its intentions to offer crypto services on behalf of investment companies in February 2021. Since the announcement, the oldest American bank has been working to roll out the service, and here it is today.
Per the announcement, BNY Mellon will use software developed by Fireblocks to store the crypto assets. In contrast, another software developed by Chainalysis will be utilized to track the movement of funds to and from BNY Mellon’s custody platform.
The service will officially begin this week with a few investment fund companies. However, BNY Mellon plans to expand the offering to onboard more clients in the future.