New York bank Mellon Corp., the oldest bank in the country, is making the leap into the cryptocurrency market.
The custody bank said Thursday it will hold, transfer and issue bitcoins and other cryptocurrencies on behalf of its asset management clients. Over time, BNY Mellon will allow these digital assets to go through the same plumbing used by other managers ’more traditional holdings, from Treasurys to technology stocks, through a platform that is now in prototype. The bank is already discussing plans with customers to incorporate their digital currencies.
“Digital assets are becoming part of the mainstream,” said Roman Regelman, executive director of digital services and asset services at BNY Mellon.
It’s a big step for Wall Street back-office banks, concerns about regulatory, legal and stability risks left them reluctant to come into direct contact with the crypto markets. But as the prices of bitcoin and other digital assets have continued to rise, they have become more popular among asset managers, hedge funds, and other institutional investors.
And top executives at these companies began asking BNY Mellon and his colleagues to treat digital assets as they would their other stakes, Regelman said.