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Bank of New York Mellon Plans to Start Banking Cryptocurrencies

By Bram Berkowitz - Feb 11, 2021 at 10:34AM

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The large custody bank said it would start transacting digital assets in the same way it does for more-traditional financial instruments.

Bank of New York Mellon (BK 1.80%), one of the largest custodian banks in the world, plans to begin serving the cryptocurrency needs of its asset management clients.

The Wall Street Journal reported this morning that BNY Mellon will soon "hold, transfer and issue" Bitcoin (BTC 1.15%) and other digital assets in the same way it does with more-traditional financial instruments such as stocks or bonds. The bank plans to do this with a platform that is currently in prototype.

"Digital assets are becoming part of the mainstream," said Roman Regelman, the head of BNY Mellon's digital and asset-servicing businesses, according to the Journal.

Picture of Bitcoin symbol.

Image source: Getty Images.

Regelman said that up until now, clients such as hedge funds, asset managers, and other institutional investors have had to use separate custodians to hold their digital assets.

But as cryptocurrencies have gained popularity and become more mainstream in recent months, these clients have asked BNY Mellon if they could move their holdings to the company.

The news comes as Bitcoin has been on an unprecedented run, at one point recently topping $48,000 per token. It also comes after Tesla (TSLA 7.33%) purchased $1.5 billion worth of Bitcoin and began accepting the cryptocurrency as payment for products.

BNY plans to begin offering service for cryptocurrencies later this year. It has tapped Mike Demissie, head of the bank's advanced solutions unit, to lead the team overseeing digital currencies. 

Regelman still thinks it will be another three to five years until cryptocurrencies are fully part of the traditional financial system, but digital assets continue to get more mainstream with each passing day.

Shares of Bank of New York Mellon were up more than 4% as of 10 a.m. Thursday morning.

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