Bank of New York Mellon Corp., has become the latest traditional financial institution joining the bitcoin party. The custodian bank which safekeeps about $41 trillion in client assets announced Thursday that it is launching a cryptocurrency-focused unit later this year.
The unit will “hold, transfer and issue bitcoin and other cryptocurrencies” on behalf of BNY’s existing institutional clients. The bank is building out a solution for this specific purpose and will be able to treat cryptocurrencies in the same way they do existing traditional assets held by their customers.
Speaking in a WSJ report, Roman Regelman, chief executive of BNY Mellon’s asset-servicing and digital businesses noted that their new offering is not merely a result of the bank’s quest to steal a match ahead of their competitors.
Instead, he said that “digital assets are becoming part of the mainstream,” and confirmed that institutional investors are already demanding such an offering from BNY Mellon and their peers. The firms ask large custodians to treat bitcoin and other cryptocurrencies as they would other assets and provide services that allow clients investing in these assets to leverage it fully.
Aside from providing custody for client’s crypto, Caroline Butler, head of custody at BNY Mellon said the bank eventually wishes to provide a level of interoperability that will let “clients borrow or lend bitcoin versus the dollar.”
While there is no fixed date for rollout, the latest move by BNY Mellon breaks the hoodoo for other U.S banks and further legitimizes institutional involvement with Bitcoin. JP Morgan Chase, and Citi Bank, are the two other firms also rumored to be working on a crypto-custody solution.
In recent months and weeks, the adoption of cryptocurrencies has hit remarkable levels with traditional institutions that once ignored the trend, now rolling out support en masse.
Earlier this week, CNIR reported that Mastercard would let its over 30 million merchants accept cryptocurrencies. E-commerce giant, Amazon is also reportedly working on a ‘digital currency’ project in Mexico.
