The Bank of New York Mellon on Wall Street, New York.
Scott Mlyn | CNBC
Bank of New York Mellon, the country’s oldest bank, said on Thursday that it is starting to fund bitcoin and other digital currencies.
The custody bank will eventually pass digital currencies through the same financial network that it currently uses for more traditional holdings such as US Treasuries and stocks, after months of analyzing its prototype digital asset framework.
“BNY Mellon is proud to be the first global bank to announce plans to offer an integrated digital asset service,” Roman Regelman, CEO of asset servicing and head of digital at BNY Mellon, said in a release.
“The growing customer demand for digital assets, the maturity of advanced solutions and improving regulatory clarity provide us with a great opportunity to expand our current service offering into this emerging area,” he added.
The CEO of BNY Mellon added that pending product analysis and approvals, the bank should begin offering the services to its clients later this year. The Wall Street Journal first made mention of the bank’s cryptocurrency announcement.
Shares of BNY Mellon were up 2% in premarket trading after the news.
The move is an important step for the country’s leading custodian banks, which specialize in protecting the financial assets of their clients’ companies and individuals.
In the past, major custodian banks have raised concerns about potential regulatory or legal risks associated with banking the cryptocurrency market. But as the prices of bitcoin and other digital assets have continued to rise, they have become more popular with asset managers, hedge funds and other institutional investors.
Bitcoin, with a robust start in 2021, rose 7.7% around $ 48,250 in New York at 8:30 a.m. according to Coin Metrics. The digital currency is up more than 60% since the beginning of the year.
Individual investors and companies have become more comfortable with digital currencies as top business leaders, including Tesla CEO Elon Musk, put their backs on a handful of assets.
Tesla announced earlier this month that it has purchased $ 1.5 billion worth of bitcoin for “greater flexibility to further diversify and maximize returns on our cash.”
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