BNY Mellon to protect custody services for cryptocurrencies

Bank of New York Mellon Corporation, more commonly known as BNY Mellon, is opening up its custody services for crypto for the first time so that they can be enjoyed by its users as well. As is well known, the cryptocurrency market is booming, the world is becoming increasingly aware of it, and banks can no longer stand idly by: they must take ownership of digital assets. The demand for crypto services is growing rapidly, so ignoring the supply is foolish. A reliable and regulated means for active consumer participation must be provided.

Many banks around the world are already taking steps, or have done so, to provide cryptocurrency custody services. 

When will BNY Mellon be active

Not long ago, Katey Neate, chief risk officer for asset servicing and digital at BNY Mellon, had said:

“We announced last year that we were standing up for digital asset users. The idea is that we build a digital asset platform the cornerstone of which is custody that will enable the interoperability of traditional assets and digital.”

The bank had received approval from New York’s financial regulator earlier this same year. 

Today, Bank of New York Mellon is ready and said it will start receiving cryptocurrencies from customers starting Tuesday. 

This factor will help make BNY Mellon the first massive US bank to provide two services at the same time: the protection of traditional banks and the protection of digital assets

The actions that will be carried out by BNY starting this week are multifaceted: first, the acceptance of BTC and ETH, then, the custody of the keys of the digital asset, and finally, the provision of accounting services similar to those of stocks and commodities.

BNY Mellon’s move will not only add to the prestige, but also represent a not insignificant turning point in traditional banks’ adoption of digital assets as if they were a real market and a source of profitable revenue.

In detail

Specifically, what will be the upcoming changes at BNY Mellon after the introduction of custody services for cryptocurrencies?

Bitcoin and Ethereum will be the first two cryptocurrencies supported by the new platform at launch, but the idea of other digital and traditional tokenized assets to be added in the future is by no means remote. 

Specifically, BNY Mellon’s cryptocurrency custody service will be geared to a development framework developed by Fireblocks, the renowned blockchain startup platform specializing in digital asset custody. In fact, as previously reported by CryptoSlate, the bank was previously among the other investors who helped Fireblocks raise $133 million in its Series C funding round last March.

Neate, expressing hope for the bank’s future intentions, added:

“I think regulatory clarity is improving, and people are feeling more confident because of that regulatory clarity.”

In addition, BNY Mellon had previously announced that it would team up with crypto intelligence firm Chainalysis to use its risk management software as part of the strategy so it can develop crypto services for clients. 

New frontiers and challenges for BNY Mellon

As previously anticipated, Bank of New York Mellon’s first statements about incorporating cryptocurrency services date back to February 2021.

Every promise is a debt, and today BNY Mellon will be the first to provide a diversified platform: for both cryptocurrency and traditional finance. Specifically, BNY Mellon will provide custody services using Fireblocks’ software for cryptocurrency storage and Chainalysis‘ services that will allow it to track the path of cryptocurrencies that have entered the bank.

Robin Vince, president and CEO of Bank of New York Mellon, recently said:

“We are excited to help drive the financial industry forward.”