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BNY Mellon, the oldest bank in America, has revealed that it would be moving into cryptocurrencies. This Move is a major one for the crypto industry as it continues the rapid adoption of crypto-assets by traditional financial institutions.
Crypto custodial services
The custodial bank revealed on Thursday that it would be launching a crypto-based custodial service. This service will help hold, transfer, and issue crypto-assets, including bitcoins, on behalf of its institutional clients.
BNY Mellon will also enable the transfer of digital assets from traditional holdings to technology stocks via a platform that is still in its test phase. The bank is also looking at issuing digital assets, including tokenized securities and real investments. The bank stated that it is in discussions with clients to bring digital currencies into its portfolio.
Mike Demissie, head of advanced solutions at BNY Mellon, echoed that the custodial service will depend on their client’s interest and demand. “It 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 a particular market,” he said.
A significant move by a banking powerhouse
BNY Mellon is the world’s biggest custodial bank with over $40 trillion worth of assets in its portfolio. This makes its Move towards offering crypto services a huge one with significant ramifications for the crypto industry.
It is a significant step for the banking sector, which has been reluctant to acknowledge the growing rise in cryptocurrencies. Financial institutions have made concerns over the regulatory, legal and financial risks of holding cryptoassets. Nevertheless, the growing rise in bitcoins and other digital asset prices has made it attractive in recent months. It is no surprise that several hedge funds and traditional investment firms have begun holding cryptocurrencies.
Last year American insurance bank MassMutual purchased $150 million worth of bitcoins and invested in NYDIG. This year has continued the trend with leading car manufacturer Tesla buying $1.5 billion worth of bitcoins. It will be interesting to see how this latest news affects bitcoin’s price in the coming hours.