BNY Mellon Has Launched Its Cryptocurrency Custody Service
A new division has been established by BNY Mellon, which manages nearly $47 trillion in assets, to offer its clients "an integrated service" for digital assets. This service will include traditional cryptocurrencies and may also include stablecoins.
Customers of BNY will be able to keep Bitcoin and Ether in the company's crypto wallets, which are powered by Fireblocks technology, once they become live.
America's oldest bank stated that "the idea is that we build a digital asset platform, the cornerstone of which is custody that will enable the interoperability of traditional assets and digital, citing increased client demand, blockchain maturity, and improved regulatory clarity. "
Furthermore, the custodian bank, which manages $2 trillion in assets, claims that even conservative clients want exposure to digital assets. The new offering also targets domestic crypto enterprises, such as Coinbase and other US exchanges, that are interested in BNY Mellon's core investing services.
BNY Mellon has the scale to redefine financial markets through blockchain technology and digital assets, touching more than 20% of the world's investable assets. "As we start on the next phase of our innovation journey, we are pleased to help move the financial sector ahead," said Robin Vince, Chief Executive Officer and President of BNY Mellon.
“As the world’s largest custodian, BNY Mellon is the natural provider to create a safe and secure Digital Asset Custody Platform for institutional clients. We will continue to innovate, embrace new technology and work closely with clients to address their evolving needs,” added Caroline Butler, BNY Mellon's CEO of Custody Services.
BNY Mellon has been working on a prototype that would ultimately allow cryptocurrencies to flow through the same financial network that it presently employs for traditional asset investments such as stocks and bonds. This system is described by the custodial bank as “the first multi-asset digital custody and administration platform for both traditional and digital assets—bringing bitcoin and cryptocurrencies under the same roof as traditional holdings.”
BNY Mellon entered the cryptocurrency field earlier this year when it teamed with Bakkt, the first federally regulated cryptocurrency marketplace, to offer geographically distributed storage of private keys backed by the bank.
In effect, BNY Mellon's conventional function as an asset custodian allows Bakkt to comply with federal requirements requiring brokers, exchanges, and others to keep investors' assets with institutions like as Bank of New York.
As a result, BNY and Bakkt have established a crypto-custody service, in which the Wall Street bank's experience of securing institutional clients' assets is used to keep Bakkt's digital assets.
Interestingly, BNY Mellon has been accused of having a key part in the OneCoin cryptocurrency scam. According to FinCEN records, the bank handled money totaling $137 million for firms and individuals linked with the $4 billion Ponzi scam.
A Texas court accepted the US Commodity Futures Trading Commission's application for a default judgment against Troy Mason, a Grand Prairie man who conducted foreign-exchange fraud for more than two years.
BNY Mellon, which manages around $47 trillion in assets, has established a new section committed to offering its clients 'an integrated solution for digital assets, which would include traditional cryptocurrencies and might be expanded to include stablecoins.