Bank of New York Mellon Corp, America’s oldest custody bank, has announced that it will begin financing Bitcoin and other cryptocurrencies for their clients.
The custody bank will eventually allow digital currencies to pass through the same financial network it currently uses for more traditional holdings like U.S. Treasury bonds and equities.
“BNY Mellon is proud to be the first global bank to announce plans to provide an integrated service for digital assets,” Roman Regelman, CEO of asset servicing and head of digital at BNY Mellon, said in a press release.
“Growing client demand for digital assets, maturity of advanced solutions, and improving regulatory clarity present a tremendous opportunity for us to extend our current service offerings to this emerging field,” he added.
Pending product analysis and approvals, the bank should begin offering the services to its customers later this year. Shares of BNY Mellon rose 2% in premarket trading following the news.
BNY Mellon Is Not The First U.S. Financial Institution To Offer Bitcoin Custody
BNY Mellon isn’t the first U.S. Financial institutions to offer Bitcoin custody service for its institutional clients. Back in 2018, Fidelity Investments announced the launch of Fidelity Digital Assets. Helping its clients to trade and store cryptocurrencies.
Interestingly enough, BNY Mellon’s announcement of offering Bitcoin custody came on the heels of U.S. Treasury Secretary Janet Yellen claiming that central banks would never offer direct Bitcoin custody services.
In the past, major custodian banks expressed concerns over potential regulatory or legal risks involved in banking the cryptocurrency market. But more banks like BNY Mellon are beginning to warm up to cryptos. Due to a surge in interest from asset managers, hedge funds and other institutional investors.
At press time, Bitcoin was up 7.7% around $48,250 on Thursday morning. The digital currency has rallied more than 60% since the start of the year.
Bitcoin’s current bull run has been sparked by the news that Tesla purchased $1.5 billion worth of the asset in January. The electric vehicle company also hinted that it will soon begin accepting BTC as a form of payment for its products.