By Samuel Indyk
Investing.com – Bank of New York Mellon (NYSE:BK) is set to hold, transfer and issue bitcoin and other cryptocurrencies on behalf of its asset management clients, according to a report in the WSJ. The company plans, in time, to allow digital assets to pass through the same plumbing used by more traditional holdings like stocks or bonds.
“Digital assets are becoming part of the mainstream,” said Roman Regelman, chief executive of BNY Mellon’s asset-servicing and digital businesses.
This marks another step forward for cryptocurrencies getting accepted by the corporate world after other news stories this week.
Firstly, Tesla Inc (NASDAQ:TSLA) announced they had purchased $1.5bln of bitcoin to diversify reserves. Mastercard (NYSE:MA) announced they would be following PayPal’s lead and allow payments in cryptocurrencies later this year and Twitter Inc (NYSE:TWTR) said they have had discussions about potentially paying vendors and employees in the popular cryptocurrency. Many will look at these stories as confirmation that the cryptocurrency space is gaining institutional credibility.
Timeline
Regelman expects it to be another three to five years before digital assets are fully integrated in Wall Street’s traditional infrastructure. In terms of when BNY Mellon plans on offering the capabilities to hold, transfer and issue digital assets, it intends to offer these this year.
Other banks are also reportedly exploring cryptocurrency custody services. The Block, a cryptocurrency news site, reported last year the JPMorgan (NYSE:JPM) and Citigroup Inc (NYSE:C) were both exploring digital asset custody although there has been no confirmation on how far down the line that process is.
Fidelity Investments currently operates something similar and has been providing custody services for cryptocurrencies since 2018. The plan won regulatory approval to provide the services in New York under its Fidelity Digital Assets unit.
Bitcoin
Following the announcement by Bank of New York Mellon, bitcoin prices rose to all time highs, jumping another 8% and heading towards $50,000.