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Bitcoin: BNY Mellon prepares to launch crypto-currency custody platform

U.S. bank BNY plans to launch a crypto-currency custody platform for its clients.

The news is out: investment bank BNY Mellon plans to launch a so-called custodial platform to allow its institutional clients to gain exposure to crypto-currencies. This is a first for this player. This opens up a new avenue for institutional clients looking to enter the digital ecosystem.

This new custody platform will allow clients to hold some of the most popular crypto-currencies on the market. Bitcoin and Ethereum are the first to be affected. For now, NFTs are not included in the storage facility, which may be unfortunate considering the latest trading volumes in this market.

The bank says the goal is to quickly expand the service to include a wider range of cryptos, subject to regulatory approvals. It emphasizes and believes that regulation, far from being a hindrance, leads to confidence. A confidence that should reassure the last hesitant.

These assets will be held directly on BNY Mellon’s wallets which are based on Fireblocks technology. Institutional investors will not directly own their bitcoins or other crypto-assets.

However, the platform is not expected to see the light of day until sometime in 2022. The product will launch in the U.S. before expanding to other global markets – depending on demand. According to an internal memo, the bank believes the launch will make it the first to enter the global space for digital curation and the leading digital assets, which are Bitcoin and Ethereum. It is not the first to take this decisive step, however, when you consider that Goldman Sachs (and others) have been particularly supportive of Bitcoin and Ethereum for some time.

“We announced last year that we were advocating for digital asset users,” said A.M. Katey Neate, head of risk for digital asset services at BNY Mellon before and added that “the idea is to build a digital asset platform with curation as the cornerstone that will enable interoperability of traditional assets and digital.” So the trend is for these two worlds to come together.

The investment bank is thus taking another step into the crypto space, after setting up a dedicated digital assets team more than a year ago.

“I think what we’re seeing in the U.K. is that there’s a really vibrant and active digital asset market,” said Talia Klein, head of commercial products for BNY Mellon, hinting that the service could arrive in the U.K. after an initial launch in the U.S. during 2022.

This new development is part of a general acceptance of Bitcoin and crypto assets, where investment banks and institutional players are becoming increasingly keen to join this particularly dynamic market.

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