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BNY Mellon reportedly regrets having not engaged with cryptocurrencies before but they hope to turn this around with the Digital Innovation Hub.
The Bank of New York Mellon Corporation (BNY Mellon), the oldest bank in America, recently set up a cryptocurrency custodian framework in Dublin, Ireland. The unit of BNY Mellon dubbed the ‘Digital Innovation Hub’, will provide users with a variety of services including storing, transferring, and issuing digital assets.
The Hub is regulated by the Central Bank and will deal in assets such as Bitcoin, central bank digital currencies, and non-fungible tokens (NFTs) among others. Digital currencies will therefore use the conventional financial network used by equities and bonds.
The bank has taken on the trend of companies incorporating digital currencies due to their increased mainstream adoption and their speculated growth. In February, the bank had announced venturing into cryptocurrencies so that clients dealing with crypto would be able to hold and trade their digital assets. For this reason, a special department was developed but a specific date of launching the services was not given.
The plans were nevertheless going to put them ahead of other leading banks such as JPMorgan Chase and Citigroup, especially considering that JPMorgan CEO Jamie Dimon recently expressed his lack of enthusiasm in cryptocurrencies. This, however, does not rule out an attitude change in digital coins for the bank.
BNY Mellon and the Digital Assets Industry
Earlier this year, the bank disclosed that it would invest in the crypto startup Fireblocks. BNY Mellon and SVB Capital jointly raised capital approximately $133 million to improve Fireblocks’ infrastructure. Fireblocks is an advisor for the top 35 banks worldwide and it has completed about $400 billion worth of digital asset transfers.
According to the New York Digital Investment Group announcement in May, hundreds of banks in the US are planning to offer digital coins’ services before the end of the year. BNY Mellon has set a trend that other banks are likely to follow. This will also attract investors who were earlier skeptical of crypto because there were no reputable banks in the management of crypto activities.
BNY Mellon reportedly regrets having not engaged with cryptocurrencies before but they hope to turn this around with the integrated digital asset service. Roman Regelman, Head of Digital at BNY Mellon said the bank would begin offering the Hub services later this year, pending approvals after product analysis. Following this announcement, the bank’s shares rose by 2% in the premarket session according to MarketWatch.
The bank was established in Ireland in 1994 and has grown to acquire assets with a $41 trillion valuation, making it the largest custodian globally.