BNY Mellon unveils its new crypto custody solution
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(Kitco News) - Bank of New York Mellon (BNY Mellon), America’s oldest bank, has revealed that it will begin allowing customers to hold their cryptocurrency assets alongside their traditional investments on the same platform – becoming the first large U.S. bank to do so.
New York’s financial regulator recently granted approval for BNY Mellon to begin receiving select customers’ Bitcoin and Ether deposits, and the bank has chosen to launch its new Digital Asset Custody platform starting this week.
Through the service, BNY Mellon will store the keys required to access and transfer a customer's digital assets and will provide the same bookkeeping services for those assets as they do for traditional investments in stocks, bonds and commodities.
BNY Mellon, which was founded by Alexander Hamilton in 1784, is the world’s biggest custody bank, with over $43 trillion in assets under custody. With this move, it has become the first of 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.
Up to this point, fund managers have been required to custody their cryptocurrencies with a crypto specialist. BNY has just simplified that process by allowing the assets to be stored and tracked on one platform.
“We are excited to help drive the financial industry forward,” Robin Vince, BNY Mellon’s president and chief executive, said in a statement.
The bank first revealed its plans to hold and transfer crypto on behalf of its clients in February of 2021 and has been working on integrating its crypto custody business into its central accounting platform since that time.
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Software developed by Fireblocks is being utilized to store clients’ digital holdings, while Chainalysis’s software is being used to help the bank get a clear picture of an asset's history before it arrives at the bank.
Select investment-fund firms will start having access to the new platform this week, and plans to expand the crypto custody service to additional clients are planned for the future, pending regulatory approvals.
According to a recent poll by Celent that was commissioned by BNY Mellon, 41% of the 271 institutional investors surveyed said they currently held cryptocurrencies in their portfolio, while another 15% indicated they were likely to purchase digital assets in the next two to five years.