Institutional adoption of crypto is catching on, and America’s oldest banking corporation, the Bank of New York Mellon (BNY Mellon), has joined in. Starting this week, the bank will provide custody for BTC and ETH. The move makes BNY Mellon the first noteworthy US bank to provide custody for digital as well as traditional assets on the same platform.
Earlier this year, BNY Mellon received approval for the crypto asset custody feature from the New York State Department of Financial Services (DFS), Wall Street Journal reports.
The move marks an important shift in the approach of traditional banks toward digital assets. It signals growing acceptance of the legitimacy of digital assets. The skepticism toward digital assets has been fuelled by the lack of clarity around the topic of regulation.
This is not the first time that the bank has taken a pro-crypto stance, though. Last year, BNY Mellon first established its crypto unit in Ireland. Then, it even urged the country’s finance authorities to introduce crypto regulations before the European Union (EU) lays out a regulatory framework for the industry.
Custody banks like BNY Mellon are popular among fund managers who rely on them to track asset prices. In fact, BNY Mellon is the largest custody provider in the world. However, before now, fund managers had to turn to crypto specialists for safeguarding their digital assets.
Customers who want to use this feature will have to allow the bank to store their private keys. This will enable the bank to provide the same bookkeeping services for crypto as more traditional assets.
In order to provide crypto custody services and analyze crypto assets held, BNY Mellon is leveraging Fireblocks software’s custody solution along with software developed by the blockchain surveillance firm Chainalysis.
Speaking about the initiative, Robin Vince, BNY Mellon’s president and chief executive, stated that the bank is “excited to help drive the financial industry forward.”