One of the oldest banks in America is now becoming one of the newest early adopters of cryptocurrency brokerage strategies.
Marie Huillet at Cointelegraph reports Bank of New York Mellon will provide custodial services for Bitcoin as part of a modernizing program to embrace fintech and blockchain developments.
“The impetus for the decision reportedly came from institutional investors — the top brass of BNY Mellon’s clientele — amid the 2021 bull season for the asset class,” Huillet writes, also reporting that spokespersons at BNY Mellon say digital assets are “becoming part of the mainstream.”
Recognizing this benchmark, Ian Allison at Coindesk notes that in pivoting this way, BNY Mellon beats competitors like J.P. Morgan and Citigroup in embracing and expanding the role of cryptocurrency in the banking sector.
Characterizing what the bank offers as “white-glove prime brokerage services,” Allison talks about the potential for BNY Mellon to help usher in a new age of digital decentralized finance, quoting Mike Demissie, head of advanced solutions at BNY Mellon, from an exclusive interview:
“We are starting with the anchor in this space, which is custody … then it comes down to what our clients need from us. So that’s not just safekeeping of these assets, they want to leverage them for lending purposes, they want to leverage them for collateral. Then we are also looking at issuing digital assets, like tokenized securities, real assets.”
At the same time that banks like BNY Mellon are working on specifically brokered crypto currency services, though, platforms like CoinZoom are working on non-custodial arrangements, where traders can make all kinds of transactions without losing control of their assets, and brokers don’t have as heavy of a paperwork burden.
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