US Oldest Bank Prototypes Platform to Incorporate Cryptocurrencies

BNY Mellon will soon hold, transfer and issue cryptocurrencies on behalf of its asset management clients.

Bank of New York Mellon plans to provide its clients with ‘an integrated service’ for digital assets, which would cover classic cryptocurrencies and could be extended to stablecoins.

America’s oldest bank will soon hold, transfer and issue cryptocurrencies on behalf of its asset management clients, citing growing client demand, maturity of blockchain solutions and better regulatory clarity.

“Pending further evaluations and approvals, we expect to begin offering these innovative and industry-shaping capabilities later this year,” said Roman Regelman, CEO of asset servicing and Head of Digital at BNY Mellon.

Further, the custodian bank, which is sitting on $2 trillion in assets under management, states that even conservative clients are seeking exposure to digital assets. The new offering also targets native crypto firms, like Coinbase and other US exchanges, who are looking for BNY Mellon’s core investment services.

BNY Mellon is currently developing a prototype that will eventually allow cryptocurrencies to pass through the same financial network it currently uses for investments in traditional assets like bonds and stocks. The custody bank describes this system 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.”

Suggested articles

Viberate Teams Up with Blockparty to Deliver World’s First Live Event NFTGo to article >>

BNY Mellon ventured into the crypto space earlier in 2019 when it partnered with Bakkt, which created the first federally regulated cryptocurrency marketplace, to offer geographically-distributed storage of private keys secured by the bank.

In essence, BNY Mellon’s traditional role as a custodian of assets enables Bakkt to meet federal regulations that require brokers, exchanges and others to store investors’ assets with institutions like Bank of New York.

Consequently, BNY and Bakkt have set up a crypto-custody service, under which the Wall Street bank’s history of safeguarding the assets of institutional clients is leveraged to store Bakkt’s digital assets.

Furthermore, BNY Mellon was accused of playing a central role in the OneCoin cryptocurrency scam. FinCEN files showed the bank processed funds worth a total of $137 million for companies and people associated with the $4 billion Ponzi scheme.

Got a news tip? Let Us Know