Large clients demand the “tipping point” of BNY Mellon’s crypto services
BNY Mellon CEO Robin Vince says “client demand” was the “tipping point” that ultimately led to the bank’s launch of institutional-focused crypto services last week.
BNY Mellon, America’s oldest bank, became the first major bank in the country to offer custody for institutional clients’ Ether (ETH) and Bitcoin (BTC) on October 11.
In an Oct. 17 conference call following the release of third-quarter earnings, Vince pointed to a survey commissioned by the bank this year that found 91% of large institutional asset managers, private equity owners and hedge funds were interested in investing in some type of tokenized asset during of the next few years.
“About 40% of them already have crypto in their portfolios. About 75% of them are actively investing or exploring investments in digital assets,” he said, adding:
“And what we heard from our customers is that they want institutional-quality solutions in the space.”
Launched last week, the new custody service allows select institutional clients to hold and transfer Bitcoin and Ether on the same platform as they manage stocks and bonds.
Vince said the digital asset custody solution was not created “just for the purpose” of custody crypto, and that the bank sees it “as the beginning of a much broader journey.”
During the call, Vince said he envisions the tokenization of “all kinds of assets and currencies,” including traditional financial assets as well as assets that “have not been as easy to manage in the financial system,” commenting:
“Some of these things can be handled much better using tokens.”
Examples he mentioned include goods, property, forests and certificates related to environmental, social and governance issues.
However, the BNY Mellon CEO said it could be years or even decades before the industry could see full adoption of tokenized assets.
“I’m not going to put an exact timescale on it […] But we thought that with a long-term perspective this was an important space, he said.
Related: BNY Mellon, America’s oldest bank, launches crypto services
He also noted that they are not spending “tons” of money on the space, but will instead invest in “smart” places in the ecosystem.
The bank, which has $43 trillion in assets under management as of 2022, had toyed with the idea of allowing clients to transfer and issue Bitcoin and other cryptocurrencies as early as February 2021 during the asset class’ bull run.
