- BNY Mellon has officially launched a crypto custody platform, meaning the centuries-old bank will store customers’ private keys and provide bookkeeping services on their Bitcoin and Ethereum.
- While the current wintry freeze enveloping the crypto market has cast doubt on the sector’s future, institutional demand in the space is stronger than ever.
America’s oldest bank, BNY Mellon, has launched a digital custody platform to hold Bitcoin and Ethereum on behalf of customers. BNY Mellon started receiving select clients’ BTC and ETH after winning approval from the New York State Department of Financial Services.
The move marks a significant step in cryptocurrency adoption, indicating that digital assets are here for the long haul. BNY Mellon’s dive into crypto services could instill confidence in the asset class among institutional investors who have been standing on the sidelines.
BNY Mellon offers crypto custody services
BNY has become the first major bank in the United States to offer custody of crypto assets alongside traditional investments on the same platform.
According to a report from The Wall Street Journal, the 238-year-old bank with more than $43 trillion in assets under custody will store private keys for a limited number of customers who hold Bitcoin and Ethereum. The bank will also provide other traditional bookkeeping functions.
BNY Mellon will use Fireblocks-created software to safeguard the assets and do the due diligence on any crypto arriving at the bank through Chainalysis’ compliance software.
“With Digital Asset Custody, we continue our journey of trust and innovation into the evolving digital assets space, while embracing leading technology and collaborating with fintechs,” said BNY Mellon’s Senior Executive Vice President, Roman Regelman.
Notably, the bank received the regulatory nod for crypto custody earlier this fall from New York’s financial watchdog.
Institutional money is pouring into crypto and it’s only going to grow
Although the crypto market has had a rough year — with Bitcoin, Ethereum, and most other top cryptocurrencies trading over 72 percent down from last year’s all-time highs — Wall Street has increasingly taken a keen interest in the industry citing an increasing appetite for crypto assets among institutional investors.
BNY Mellon’s move into crypto follows a wider trend across Wall Street. Last month, the second-biggest stock market operator in the U.S., Nasdaq, launched a crypto custody service for institutional crypto investors. In August, BlackRock, the largest asset manager in the world unveiled a Bitcoin trust fund to make crypto directly available to its wealthy clients.
Popular Bitcoin perma-bull Anthony Pompliano suggested that more big institutional players are preparing to “go all-in” on crypto despite the current gloomy outlook.
Regardless of what happens to price in the short term, one thing is for certain. The big financial institutions, they’re here. They’re building teams internally, and they are going all-in on Bitcoin and crypto. That might not actually help the price in the short term. But that tells me over a long period of time, this industry is not going anywhere.
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The Morgan Creek Digital co-founder revealed he recently spoke to several major funds and corporations, which indicated they are presently exploring ways to get a piece of the crypto pie and they have already started hiring and creating dedicated teams. This is further proof that the institutions are no longer coming — they’ve already arrived.