A report says that New York’s financial regulators gave the custodial lender permission in the fall to start holding bitcoin and ether for some customers.
Bank of New York Mellon (BK), the oldest bank in the U.S. and the biggest custodian bank in the world, added cryptocurrency custody services on Tuesday, according to a press release.
Up until now, traditional fund managers who wanted to hold digital assets and usually use Bank of New York Mellon or another custodial lender to handle the back-office tasks related to their securities holdings would have had to find a firm that specializes in cryptocurrency to provide custody services.
The news first came out in the Wall Street Journal.
OneCoin was a scam in which the Bank of New York Mellon took part.
Also, the custodian bank, which is in charge of managing $2 trillion worth of assets, says that even conservative clients are looking for ways to invest in digital assets. The new service is also aimed at crypto companies based in the US, like Coinbase and other exchanges, that want to use BNY Mellon’s main investment services.
Bank of New York Mellon is working on a prototype that will eventually let cryptocurrencies use the same financial network that it uses for investments in traditional assets like bonds and stocks. The custody bank calls this system “the first multi-asset digital custody and administration platform for both traditional and digital assets, bringing bitcoin and other cryptocurrencies under the same roof as traditional holdings.”
BNY Mellon got into the crypto space early in 2019 when it partnered with Bakkt, which created the first federally regulated cryptocurrency marketplace, to offer geographically-distributed storage of private keys that are protected by the bank.
In essence, BNY Mellon’s traditional role as a custodian of assets helps Bakkt meet federal rules that require brokers, exchanges, and others to store investors’ assets with institutions like Bank of New York Mellon.
So, BNY and Bakkt have set up a crypto-custody service. The Wall Street bank’s history of keeping institutional clients’ assets safe will be used to store Bakkt’s digital assets.
On the other hand, the Bank of New York Mellon was accused of being at the center of the OneCoin cryptocurrency scam, which is an interesting claim. FinCEN files showed that the bank handled $137 million in funds for companies and people involved in the $4 billion Ponzi scheme.
BNY Mellon will now be able to store the keys that these fund managers need to use their bitcoin (BTC) and ether (ETH) and move them around, as well as do other traditional bookkeeping tasks.
