Bank of New York Mellon, the world’s largest custodian bank, said it would begin storing clients’ crypto assets starting Tuesday, despite the price chaos of digital assets.
The service allows certain customers to hold and transfer bitcoin BTCUSD,
and ether ETHUSD,
through BNY Mellon, the lender said in a statement on Tuesday. The addition makes BNY Mellon BK,
the largest US bank offering custody of both crypto and traditional assets.
Although bitcoin has lost nearly 60% of its value so far this year, “we continue to see significant demand from institutional investors and are excited about future opportunities from blockchain and tokenization technology for assets and cash,” said Caroline Butler, CEO of Custody. services at BNY Mellon, wrote to MarketWatch in an email.
“BNY Mellon is signaling that they are going to tool up so that if a fund or a fund manager wants to access crypto, they have the necessary 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 for digital assets, as BNY Mellon, with $43 trillion in assets under custody as of June, has existing relationships with many financial heavyweights.
“For a public pension fund to be able to invest in this space, they’re not going to be looking to hold their coins or tokens with an institution they’re not familiar with. That just adds additional risk,” said Steve Russell, portfolio manager and senior analyst at Emerald , in an interview.
“BNY Mellon is an institution that many of these public pension funds and financial institutions are used to working with. There is a comfort level there,” Russell said.
The bank’s move also indicated it “at least believes the possibility exists that we will get regulation in the area that will allow institutional growth going forward,” Russell added.
Echoing the point, BNY Mellon’s Butler said that “we recognize that this is a new asset class and that the regulatory landscape is evolving. Focusing on risk management is core to our entire digital asset philosophy.”
The bank “adheres to the highest standard of regulatory oversight available in the digital asset markets,” Butler wrote.
BNY Mellon follows a similar move by BlackRock, which in August partnered with Coinbase to give certain customers the ability to trade, finance and hold crypto assets in custody.
Bitcoin has lost 1.1% in the past 24 hours to around $19,028, according to CoinDesk data. Ether is trading at around $1,284, down 1.8% in the last 24 hours.
