Bank of New York Mellon, the nation’s oldest bank, said Thursday that it will begin holding custody of bitcoin and other digital currencies.
BNY Mellon formed a new team that’s developing a multi-asset digital custody platform for traditional and digital assets, they said in a statement. The unit will be overseen by Mike Demissie, head of advanced solutions.
Shares of BNY Mellon rose 2% the day of the announcement. The move represents a significant step by the country’s most prominent custodian banks, which is now firmly adopting cryptocurrencies.
“The platform we have will be driven by client interest and demand, and we also stayed tuned to regulatory activity to make sure we are supporting assets that are allowed in particular markets,” said Demissie in an interview.
BNY Mellon was formed from the merger of The Bank of New York and Mellon Financial Corporation in 2007. It is the world's largest custodian bank and asset servicing company with $41 trillion under custody and $2.2 trillion under management across 35 countries, as of December 31, 2020.
“BNY Mellon is proud to be the first global bank to announce plans to provide an integrated service for digital assets,” said Roman Regelman, head of digital at BNY Mellon, “Digital assets are becoming part of the mainstream,” he said.
BNY Mellon said it would allow digital assets to pass through the same plumbing used by other asset managers with more traditional holdings — such as treasuries, equities and commodities. While the benefits are obvious to fintech companies wanting to transact in bitcoin, many Reddit users were quick to point out that banks holding bitcoin for customers defeats the purpose of bitcoin, but centralized exchanges provide an invaluable service to the crypto community to onboard and offboard customers and integrate with traditional asset classes.
As a New York State-chartered banking institution, they are already authorized to hold custody on digital assets without the need to obtain a New York Bitlicense, with the approval of the Superintendent.
Mellon was founded in 1869 by Thomas Mellon and his two sons, Andrew W. Mellon and Richard B. Mellon, and originally named it T. Mellon & Sons' Bank. In 1902, the institution renamed to Mellon National Bank.
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