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The oldest lender in the US and the world’s largest custodian bank, BNY Mellon, has launched a crypto custodian platform. It has been made for holding clients’ private keys and bookkeeping digital assets— Bitcoin and Ethereum.
On October 13, BNY Mellon said that the digital asset custody platform is live in the US. This move made it the first bank in the country to offer traditional investments and custody of digital assets within the same platform. However, they further mentioned its availability is limited to a few institutional clients in the US as of now.
The custodian bank will utilize compliance software like Know Your Transaction (KYT) from Chainalysis for due diligence and other tools for assessing counterparties and transaction volumes.
BNY Mellon continues their journey with innovation and credibility in the evolving digital assets domain. This is done with the help of cutting-edge technology and collaborations with leading FinTechs, said the CEO of security and services at BNY Mellon, Roman Regelman.
Moreover, a spokesperson of BNY Mellon told Decrypt via mail that the clients can choose to custody only the digital assets. Moreover, they mentioned plans to add support for other crypto assets based on demand, regulatory compliance, and commercial opportunity.
BNY Mellon and the digital assets
In Q1 of this year, BNY Mellon indicated the plans to cover the crypto custody for its customers. Later after that month, BNY revealed Bitcoin custodian services in Ireland which were opposed by their central bank’s officials.
Talking about the current stage, the bank has around $45 trillion worth of assets in total. Out of this $43 trillion is under custody and $2 trillion is under management. As BNY acts as a custodian, they mainly do not involve in providing asset allocation strategies or financial advice.
In April, Michael Shaulov, co-founder and CEO of Fireblocks, cited the nuisances of building a crypto custody platform on BNY’s podcast. He talked about how they face two significant challenges. The first challenge is how to secure the private key. This plays a vital role in keeping the funds secure in the wallet. And second is to ensure that the funds you are transferring must move to the right location.
While all such debates or talks may still persist in the future, Tuesday’s news indeed created highlights for BNY. This was mainly because of their crypto custody platform, especially at a time when the market is bearish. Also, it’s worth noting that the bank got the crypto custody approval from the New York financial’s authority this fall.
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