The Bank of New York Mellon, the nation’s oldest bank, will be among the first to brave the new world of cryptocurrency.
The custody bank, whose slogan is “Consider Everything,” said on Thursday it would begin financing digital currency such as bitcoin, which will eventually pass through the same network it uses for traditional bonds and equities under a currently prototyped system. It will hold, issue, and transfer digital assets starting later this year.
The move was first reported by The Wall Street Journal.
“BNY Mellon is proud to be the first global bank to announce plans to provide an integrated service for digital assets,” Roman Regelman, the bank’s head of digital, said in a statement. “Growing client demand for digital assets, maturity of advanced solutions, and improving regulatory clarity present a tremendous opportunity for us to extend our current service offerings to this emerging field.”
As the country’s leading custodian, which specializes in safekeeping client securities from loss or theft, BNY Mellon is taking a trailblazing step down the cryptocurrency path. Custodian banks have historically hesitated to deal with cryptocurrency due to regulatory and legal risks, but as assets such as bitcoin have risen in prominence, so have their popularity with banks’ wealthy clients.
The move follows news from fellow legacy institution Mastercard, which said on Wednesday it would begin allowing merchants to accept cryptocurrency on its network, signaling a larger shift as Wall Street mainstays warm up to bitcoin and its peers.
Bitcoin has enjoyed a tremendous rally in the last four months after receiving votes of confidence from massive payment platforms Square and PayPal. Its celebrity supporters include Jack Dorsey and Elon Musk; the latter’s recent tweet featuring a Lord of the Rings-themed crypto reference fueled a 7% surge in bitcoin’s value. Musk’s electric carmaker Tesla recently invested $1.5 billion in the cryptocurrency, according to a filing made public earlier this week.
Bitcoin’s price is up nearly 5% in midday trading and more than 300% over the past half-year.