America’s oldest bank to offer Bitcoin custody services

The Bank of New York Mellon, trusted by clients in 35 countries to custody assets valued at $41.1 trillion, will add Bitcoin custody and other cryptocurrency services to its roster, according to The Wall Street Journal.

The financial institution, founded in 1784, plans to eventually move digital assets into the same system that currently houses assets more familiar to investors—stocks and bonds. The bank’s leadership is discussing this with clients.

“Digital assets are becoming mainstream,” said Roman Regelman, the bank’s executive director of digital businesses.

The article notes that the move by The Bank of New York Mellon marks a major step for custodial banks. Previously, they were hesitant to engage directly with cryptocurrency markets due to concerns about volatility and regulatory risks.

New records, primarily Bitcoin, have prompted traditional custodial banks to change their stance. This was driven by growing institutional investor interest, the Wall Street Journal notes.

Regelman said that clients have begun asking the bank to treat cryptocurrencies the same as other assets it holds.

Prior to this, Fidelity Investments, the asset-management company, launched a service for custody and trading of Bitcoin and Ethereum. A year later, the organization obtained a trust license from the New York State Department of Financial Services.

The Wall Street Journal argues that this case could be seen as the first instance of a major custodian bank treating cryptocurrencies as other assets. The bank plans to implement the initiative within this year.

The Bank of New York Mellon expects the move will prompt many clients to transfer their digital assets into its custody. Regelman said that previously investors had to entrust cryptocurrencies to multiple custodians.

The institution has formed a dedicated team to study the integration of digital assets into all areas of the organisation’s activities.

Regelman believes the process of integrating cryptocurrencies into Wall Street’s traditional infrastructure will be completed within three to five years.

Earlier, the Office of the Comptroller of the Currency (OCC), a bureau of the U.S. Treasury, approved Protego Trust Bank’s application for a nationwide digital asset bank license. The organization became the second after the custodian Anchorage.

Previously, the OCC allowed banks to hold stablecoin collateral and keys to cryptocurrency wallets on behalf of clients.

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