Saturday 26 February 2022 5:30 am | Updated: Saturday 26 February 2022 6:02 am

Exclusive: BNY Mellon plots launch of crypto custody platform

US bank BNY Mellon is planning to launch a digital asset custody platform to enable institutional clients to gain exposure to crypto.

The new custody platform will allow clients to hold the world’s most popular crypto currencies bitcoin and ether in BNY Mellon crypto wallets which will be supported by Fireblocks technology. According to BNY Mellon, the launch of the new product later this year will make the investment bank “the first to enter the global digital custody space.”

“We announced last year that we were standing up for digital asset users,” Katey Neate, the chief risk officer for asset servicing and digital at BNY Mellon, told City PM. “The idea is that we build a digital asset platform the cornerstone of which is custody that will enable the interoperability of traditional assets and digital.”

Confident

The 238-year-old bank has been taking increasingly confident strides into the crypto space after setting up a dedicated digital asset team a year ago. The new crypto custody product will first launch in the US before expanding to additional markets globally based on demand.

“I think what we’re seeing in the UK is that there’s a really vibrant and active digital assets market here,” said Talia Klein, the head of digital asset custody commercial products for BNY Mellon, hinting that the service could be coming to Britain after an initial US launch.

According to Klein and Neate, while the custody service will initially cater to just two digital assets the aim is to rapidly expand the service to include a range of tokenized traditional and digital assets subject to regulatory approvals.

“I think regulatory clarity is improving, and people are feeling more confident because of that regulatory clarity,” Neate said.

“It’s still not the Nirvana that we’re looking for, but it’s at least easier to read the tea leaves now and understand what to look for when you’re developing a risk framework,” she continued.