BNY Mellon’s Digital Asset Custody Platform Goes Live in U.S.

BNY Mellon’s new multi-asset digital custody and administration platform has finally gone live in the U.S., with some clients now able to hold and transfer Bitcoin and ether.

In February 2021, BNY Mellon established an enterprise digital assets unit to develop digital asset technology services, and to secure infrastructure for transferring, safekeeping, and issuing digital assets. At the time, the company said it was expecting to begin offering the services before the end of last year.

The digital asset team is led by Mike Demissie, BNY Mellon’s head of Advanced Solutions.

BNY Mellon said it is working with digital asset technology specialists Fireblocks and Chainalysis to integrate their technologies into the digital custody and administration platform. Chainalysis’ KYT software suite is intended to detect patterns of high-risk activity with continuous, real-time transaction monitoring for all cryptocurrency assets.

The bank said that a recent survey it sponsored indicates strong demand among institutional investors for a financial infrastructure to handle both traditional and digital assets. According to the survey, 91% of institutional investors polled said they are interested in investing in tokenized products. BNY Mellon also said that 41% of institutional investors surveyed already hold cryptocurrency in their portfolios, while another 15% said they plan to hold digital assets in their portfolios within the next two to five years.

BNY Mellon is one of several banks that have either launched or have announced plans to launch digital asset units and digital asset custody platforms in the past year or so. In June 2021, Citigroup launched a digital asset unit, and this past June, the bank hired Swiss blockchain and cryptocurrency specialist firm METACO to develop and pilot digital asset custody capabilities.

State Street launched its State Street Digital about the same time as Citigroup, saying it will expand to include crypto, central bank digital currency, blockchain, and tokenization. And this past March, the digital division signed a licensing deal with Copper.co, a U.K.-based institutional digital asset custody and trading infrastructure provider. State Street Digital said it plans to use Copper.co’s technology to develop and launch an institutional-grade digital custody offering.