Crypto and banks weren’t in the same universe five years ago. Those operating in the digital asset space largely saw institutional banking as a threat. Similarly, banks saw crypto as a passing novelty. But the market has ballooned in size since then. As such, people have entered digital assets, attitudes have shifted and now banks want in. Today, one of the oldest banks in the United States, BNY Mellon (NYSE:BK), is the latest to join the crypto world as a custodian.
Early this morning, BNY published a press release detailing its new move toward providing crypto custody. Starting today, select clients in the U.S. will be able to store Bitcoin (BTC-USD) and Ethereum (ETH-USD) assets with BNY Mellon. At this time, it’s not clear whether the company intends to open up the storable assets to include others just yet.
In its press release, the company says that this move is an obvious next step. BNY CEO Robin Vince says that the company works with “more than 20% of the world’s investable assets.” Vince adds that, with BNY’s wide scale of operations, it can help to drive the DeFi industry forward.
Cybersecurity has remained a major concern across all corners of the crypto space. But BNY says it is also equipped to address these concerns. The company will now collaborate with blockchain cybersecurity companies Fireblocks and Chainalysis. With this help, BNY Mellon hopes to meet security and compliance needs for its custody product from the jump.
BNY Mellon News Marks Continued Push Into Crypto by Institutions
BNY Mellon might be the biggest name thus far to move beyond traditional investing and into crypto. However, it’s far from the first. Today’s news is just another step along the way as the cryptocurrency space and institutional banking continue to integrate.
BNY is simply jumping on a train that has been building up steam for months now. Earlier this year, banks like JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) all added or expanded on dedicated crypto investing and digital asset financial service teams, among others. Of course, the incentives to do this are quite high, especially as these companies and others have seen top employees leave to join dedicated DeFi companies.
While some retail investors have lost faith in crypto after the market crash, institutions have been only more bullish since the bubble popped. Even through the collapse of crypto prices back in May, institutions have invested more than $17 billion into the space.
This bullishness comes as institutions embrace the same philosophy that crypto evangelists espouse ad nauseum: crypto will change the way people interact with money. There are projects like Ripple (XRP-USD), for example, that seek to influence the way people send cross-border payments. This model is highly compatible with the work that banks already do — and it threatens to do so even better. By warming up to the space and working with these projects, banks can leverage the market for their own gain. It’s a stark contrast to the work these same banks did to try and squash the industry in the 2010s. But as the old saying goes, if you can’t beat ’em, join ’em.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.