Bank of New York Mellon is now open for crypto business.
The nation’s oldest bank said it would begin receiving clients’ cryptocurrencies on Tuesday, becoming the first large U.S. bank to safeguard digital assets alongside traditional investments on the same platform.
won the approval of New York’s financial regulator earlier this fall to begin receiving select customers’ bitcoin and ether starting this week. The bank will store the keys required to access and transfer those assets, and provide the same bookkeeping services on those digital currencies that it offers to fund managers for their portfolios of stocks, bonds, commodities and other assets.
The move marks an important milestone for traditional banks and their growing acceptance of digital assets as a legitimate market and a source of new business.
Money managers have long relied on BNY Mellon and other custody banks for an array of vital, if humdrum, back-office functions such as tracking changes to the value of their assets. Founded by Alexander Hamilton more than two centuries ago, BNY Mellon is the world’s biggest custody bank.
Until now, fund managers would have had to custody their digital currencies with a crypto specialist. BNY Mellon said it is the first of the eight systemically important U.S. banks to store digital currencies and allow customers to use one custody platform for both its traditional and crypto holdings.
The bank is using software developed with Fireblocks to store those digital holdings, BNY Mellon said. And Chainalysis’s software will help the bank analyze and track the path the assets take before they arrive at the bank, it said.
This year’s dramatic selloff in digital currencies wiped out $2 trillion in value, reminding individual investors and deep-pocketed institutions alike of the market’s volatility.