BNY Mellon Launches ‘Digital Asset Unit’ – Will Offer Custodial and Issuance Services

A snowball effect seems to be occurring as entries in to the digital asset sector are occurring at an increasingly rapid pace.  Today, banking giant, BNY Mellon, has announced the creation of its very own ‘Digital Assets Unit’.

Digital Assets Unit

This unit is said by BNY Mellon to be actively developing a ‘multi-asset digital custody and administration platform’.  Unit leader, Mike Demissie, elaborated on what this means, stating,

“The Digital Assets unit plans to deliver a secure infrastructure for transferring, safekeeping and issuing digital assets…Consistent with our open-architecture approach, the unit will leverage BNY Mellon's digital expertise and leading technologies from fintechs and other collaborators to speed up product development and help our clients tap into the best available solutions in the market.”

As a multi-asset service, the following are each assets which can be expected.

• Stablecoins
• Central Bank Digital Currencies
• Digital Securities
• Cryptocurrencies

Notably, this will not be the first foray into the custody of digital assets.  For over a year now, BNY Mellon has gained crucial first-hand experience in the process, through a partnership established with Bakkt.

Commentary

We know that BNY Mellon envisions a bright future for digital assets – it wouldn’t have developed and announced these upcoming services otherwise.  What are others saying on the development though?

Gavin Smith, CEO of Panxora Group, states,

“BNY Mellon's and Mastercard's entry into the cryptocurrency space moves bitcoin two huge steps closer to mainstream acceptance. While these are only initial plans to offer bitcoin services, I anticipate that, in good time, this will demonstrate bitcoin's genuine use cases and help enhance its “store of value” narrative.

Still, investors must remember that bitcoin is not a simple a get-rich-scheme. In reality, it has been, and will continue to be, susceptible to downward price swings – especially when the short-term winners look to withdraw their earnings. While another upwards price run is on the horizon, investors should remain cautious and look to implement a steady risk management strategy.”

Don Guo, CEO of Broctagon Fintech Group, states,

“BNY Mellon's and Mastercard's introduction to the cryptocurrency space, following the recent Tesla news, signals another price boom for Bitcoin. Such a big institutional endorsement will propel digital assets even further into the main stage this year, and we expect further uptake as a result of the mainstream attention.

It's crucial to note that growth will be limited if the industry fails to fix underlying issues imminently. We hope that the increasing adoption will urge the industry to prioritise liquidity provision through improving crypto infrastructure. This will ensure both existing and new participants consistently have access to the best prices and that the industry reaches the next level of maturity.”

Worlds Largest

As previously stated, BNY Mellon is one of the world’s largest banks.  The following figures highlight this, showing just how expansive the company has become.

Assets under management?       $2 trillion USD

Assets under custody?                $41.1 trillion USD

Countries of operation?              35

It is no wonder why digital asset markets have responded favourably in the time since BNY Mellon announced their impending support.  This announcement – when looked at in conjunction with those recently put out from companies like Mastercard, Visa, Tesla, and more – is a glowing endorsement of a sector ready for mainstream adoption.

Bank of New York Mellon Corporation

Founded in 2007, BNY Mellon maintains headquarters in New York, New York.  The bank has established itself as a world leading asset manager, while providing a bevy of investment services throughout the world.  Operations are geared towards each institutional, corporate, and retail investors.

CEO, Thomas Gibbons, currently oversees company operations.