New York Mellon Bank on Wall Street, New York.
Scott Mlyn | CNBC
Bank of New York Mellon, the nation’s oldest bank, said on Thursday it would start financing bitcoin and other digital currencies.
The custody bank will eventually allow digital currencies to go through the same financial network it currently uses for more traditional holdings, such as US Treasury bonds and shares, after months of analyzing its prototype digital framework.
“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 service and chief digital officer at BNY Mellon, said in a press release.
“The growing customer demand for digital assets, the maturity of advanced solutions and improved regulatory clarity are a great opportunity for us to expand our current service offerings in this emerging field,” he added.
The BNY Mellon executive added that, pending the analysis and approval of the product, the bank should start offering its customers services this year. The Wall Street Journal first reported the bank’s cryptocurrency announcement.
BNY Mellon shares rose 2% in premarket trading after news.
The move is a significant step by the country’s most prominent custodian banks, which specialize in protecting the financial assets of its customers’ businesses and individuals.
In the past, major custodian banks have expressed concern about the potential regulatory or legal risks involved in banking the cryptocurrency market. But as the prices of bitcoin and other digital assets continued to rise, they became more popular among asset managers, hedge funds and other institutional investors.
Bitcoin, up to a robust start to 2021, rose 7.7% to around $ 48,250 at 8:30 a.m. in New York, according to Coin Metrics. Digital currency has grown by more than 60% since the beginning of the year.
Individual investors and businesses have become more comfortable with digital currencies as business leaders, including Tesla CEO Elon Musk, put their weight behind a handful of assets.
Tesla revealed earlier this month that it had bought $ 1.5 billion worth of bitcoin for “more flexibility to diversify and maximize cash returns.”
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