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The oldest US bank is turning to crypto

Photo of: Joseph Stone
by Joseph Stone

Bank of New York Mellon, the oldest bank in the United States, is preparing to manage crypto-assets on behalf of its customers. The reason? Bitcoin and other cryptocurrencies are assets like any other.

Last July, the US banking regulator opened the door for crypto-custody services among these companies. Banks, which for a long time had kept their distance from these assets, can now participate in this new and exciting asset class.

And the announcement by Bank of New York Mellon in this area is almost symbolic. As the oldest bank in the United States, Bank of New York Mellon plans to launch its digital asset debut this year.

As reported in the Wall Street Journal, BNY Mellon therefore plans to hold, transfer and issue Bitcoin (BTC) and other cryptocurrencies as an asset manager on behalf of its customers.

Its first services in the crypto field will be effective “later this year”. And it is therefore the first national custodian bank to commit to introducing crypto-asset custody in the short term.

This is only natural, however, according to Roman Regelman, managing director of the bank’s asset servicing and digital activities. According to the banker, the democratization of digital assets is now a reality.

To manage these new assets, including Bitcoin, BNY Mellon is therefore developing a specific platform. This is currently at the prototype stage. Specific, but not exclusive, however. This platform will also be used to manage more traditional assets such as stocks and treasury bills.

After Mastercard, it is now the turn of another major player in the banking world to announce its debut in crypto for 2021. However, unlike the card issuer, the bank does not intend to limit itself to certain cryptocurrencies.

BNY Mellon does not set any limits on the nature of the crypto-assets it will hold on behalf of its customers. It should be noted that a dedicated team within the bank will ensure the management of these new activities.

This new business will be under the supervision of Michael Demissie, in charge of innovative technologies for the company. The senior executive will be in charge of the management of the activities in the fields of machine learning, blockchain and digital assets.

Transforming the traditional bank into a natural player in crypto will however take time. According to Roman Regelman, the full integration of digital assets into the banking infrastructure will take three to five years.