BNY Mellon has announced that it’s going to start offering crypto custody services to asset management clients—the latest financial institution to throw its hat into the ring.
In a powerful illustration of how attitudes toward Bitcoin are changing, the chief executive of America’s oldest bank told The Wall Street Journal: “Digital assets are becoming part of the mainstream.”
What’s significant with BNY Mellon’s announcement is how the bank plans to ensure that digital assets aren’t treated any differently than stocks and bonds, meaning all of these holdings will be managed through the same infrastructure.
And rather than solely focusing on the likes of Bitcoin and Ethereum, it appears that BNY Mellon has few limits on the types of digital assets that it’s willing to accept.
The announcement could be music to the ears of institutional investors who are looking for a safe place to store their crypto—and for companies considering whether to hold BTC as a reserve asset, this could be a more significant development than Tesla’s $1.5 billion buy-in.
Mastercard swoops in, too
Hours earlier, Mastercard revealed that it too was planning to support certain cryptocurrencies directly on its network—paving the way for consumer-to-merchant transactions using digital assets. The payments giant said the move was in response to an uptick in the number of consumers who use its cards to buy crypto through exchanges. Raj Dhamodharan, the company’s executive vice president of blockchain and digital asset products, said:
“Whatever your opinions on cryptocurrencies—from a dyed-in-wool fanatic to utter skeptic— the fact remains that these digital assets are becoming a more important part of the payments world.”
Mastercard acknowledged that the rollout of support for cryptocurrencies will involve a substantial amount of work, not least because of concerns over regulatory compliance and consumer protection. The company also went to pains to stress that the move wasn’t necessarily a recommendation that people should start to use digital assets—it was simply to offer a greater amount of choice to users.
Like PayPal, Mastercard’s likely to be choosy about the digital assets it chooses to support, Dhamodharan warned. He said:
“Many of the hundreds of digital assets in circulation still need to tighten their compliance measures, so they won’t meet our requirements.”
Bitcoin surges once again
When Tesla announced it had bought into Bitcoin on Monday, the markets reacted with glee—hitting $48,003. Prices cooled on Wednesday, but the latest announcements appear to have injected a newfound sense of momentum into BTC’s price. As of 8:30 a.m. ET on Thursday, the world’s biggest cryptocurrency had briefly hit new highs of $48,050.75.
It’ll take time for the full effect of BNY Mellon and Mastercard’s announcements to be felt, and it may be months before their offerings hit the market. But it appears inevitable that we’ll see more big names dive into digital assets soon—and this could end up being the driving force that propels Bitcoin above $50,000.
Facebook has been keeping a low profile of late after its embattled Libra stablecoin project (now known as Diem) suffered repeated pushback from regulators. The social network was one of the first to announce its intent to move into cryptocurrencies—and now, it’s falling behind in the race to take digital assets mainstream.
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