BNY Mellon now protects crypto. What does this mean for the industry? – CBS

Bank of New York Mellon, the world’s largest custodian bank, said it will begin storing customers’ crypto assets from Tuesday, despite the digital asset price chaos.

The service allows certain customers to hold and transfer BTCUSD bitcoins,
+0.02%
and ether ETHUSD,
-0.45%
through BNY Mellon, the lender said in a statement Tuesday. The addition made BNY Mellon BK,
-1.86%
the largest US bank to offer custody of crypto and traditional assets.

Although bitcoin has lost nearly 60% of its value since the start of the year, “we continue to see significant demand from institutional investors and are excited about the future opportunities in blockchain and technology. tokenization for assets and cash,” Caroline Butler, managing director of custody services at BNY Mellon, wrote to CNET in an email.

“BNY Mellon signals that they will equip themselves so that if a fund or fund manager wants to access crypto, they have the tools to do so securely,” Chris Kline, chief revenue officer and co-founder of Bitcoin IRA, said in an interview.

The move could boost institutional adoption of digital assets, as BNY Mellon, with $43 trillion in assets in custody as of June, has existing relationships with many financial heavyweights.

“For a public pension fund to invest in this space, it will not seek to hold its coins or tokens with an institution that it does not know. It just brings additional risk,” Steve Russell, portfolio manager and principal research analyst at Emerald, said in an interview.

“BNY Mellon is an institution that many of these public pension funds and financial institutions are used to doing business with. There’s a level of comfort there,” Russell said.

The bank’s decision also indicated that it “at least thinks the opportunity exists to the extent that we will get regulation in the space that will allow institutional growth to go forward,” Russell added. .

Echoing this point, Butler of BNY Mellon said that “we realize this is a new asset class and the regulatory landscape is changing. A focus on risk management is at the heart of our entire philosophy for digital assets. »

The bank “adheres to the highest standards of regulatory oversight available in digital asset markets,” Butler wrote.

BNY Mellon is following a similar move by BlackRock, which in August partnered with Coinbase to allow certain customers to trade, fund and custody crypto assets.

Bitcoin has lost 1.1% in the past 24 hours to around $19,028, according to data from CoinDesk. Ether is trading at around $1,284, down 1.8% in the past 24 hours.

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BNY Mellon now protects crypto. What does this mean for the industry? – CBS


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