BNY Mellon will begin receiving Bitcoin and Ethereum for its customers this week after getting approval from New York’s financial regulator. The century-old Wall Street bank has taken many steps to adopt crypto this year. While the crypto winter casts doubt on the future of the space, institutional interest still remains strong. Here are the details…
BNY Mellon to offer cryptocurrency service
The Wall Street Journal reports that America’s oldest bank has given the green light to start buying crypto on behalf of customers. According to a report released on Tuesday, BNY Mellon will begin receiving Bitcoin and Ethereum from select customers from today after receiving approval from the New York State Department of Financial Services. BNY Mellon will provide custody services for customers with the first two crypto holdings, storing the private keys used to unlock crypto wallets.
The report stated that the bank will use software developed by Fireblocks to store assets and will follow the paper trail for any crypto funds coming into the bank through Chainalysis. The institutional giant has been paying close attention to the crypto-asset space since the 2021 bull run. It first announced plans to offer Bitcoin custody services in 2021. He has since been working with Fireblocks and crypto trading platform Pure Digital.
The bank’s move could affect other big companies as well
It also teamed up with Grayscale, one of crypto’s largest investment firms, in July 2021 to help the fund manager turn its flagship Bitcoin Trust product into an exchange-traded fund. However cryptocoin.comAs we reported, Grayscale has yet to receive approval from the US Securities and Exchange Commission.
BNY Mellon’s belief in crypto could instill confidence in the asset class among other big names on Wall Street. Founded in 1784 by Alexander Hamilton, BNY Mellon is America’s oldest bank. It oversees more than $2 trillion, most of which comes from wealthy fund managers.
Wall Street interest spikes during the crypto winter
Other Wall Street institutions have signaled their interest in crypto since the space boom in 2021. But we’ve seen $2 trillion in declines over the months since the market peaked last November. Investment management titan Ruffer was another prominent corporate name in the crypto space that sparked a lot of excitement when he invested in Bitcoin last year. However, the firm later announced that it had sold its assets at a profit of $1 billion to “avoid the mania.”
Outside of Wall Street, Elon Musk’s Tesla also made headlines around the world with a $1.5 billion BTC bet. But the electric car firm lost most of its assets in the second quarter of this year. The ongoing bear market has swept away many former giants such as Terra, Celsius and Three Arrows Capital that were once crypto favorites. But some giants are still interested in the field.
Goldman Sachs began offering over-the-counter crypto trading for clients as the market crashed earlier this year. In September, Nasdaq launched its own custodial service for institutions. Some lauded names on Wall Street have hinted that they think crypto has a bright future even with a US recession on the cards. Stanley Druckenmiller said last month that cryptos could experience a “renaissance” if the public loses faith in central banks. Paul Tudor Jones called for an increase in the value of the asset class with the Fed’s economic tightening policy.
