BNY Mellon’s crypto custody model may extend beyond Bitcoin and Ether ETFs, potentially covering various digital assets.
BNY Mellon’s Crypto Custody Model May Expand Beyond Bitcoin ETFs
BNY Mellon considers expanding its regulated crypto custody services to various digital assets. This move could offer more secure and regulated solutions for the growing crypto custody market.
Gensler’s Remarks on BNY Mellon’s Custody Model
SEC Chair Gary Gensler recently spoke to Bloomberg about BNY Mellon’s crypto custody structure. He suggested that the model, which is currently approved for Bitcoin and Ether ETFs, could also work for other digital assets.
Flexibility in Crypto Custody
While the current approval is limited to Bitcoin and Ether, Gensler clarified that the custody structure is not tied to any particular asset. BNY Mellon now has the option to extend its custody services beyond Bitcoin and Ether if they choose.
Regulatory Compliance Ensures Asset Protection
BNY Mellon’s custody model relies on individual crypto wallets that ensure customer assets are protected. These wallets are separate from the bank’s assets, safeguarding them in the event of bankruptcy. This model was developed in consultation with the SEC’s Office of Chief Accountant, leading to regulatory approval.
Opportunity for Other Banks
With the SEC’s “non-objection” based on the custody structure, other financial institutions may also adopt similar models. This offers an opportunity for banks to enter the growing crypto custody market, which is increasingly in demand.
Growing Crypto Custody Market
The global crypto custody market is valued at $300 million and growing by 30% annually. Banks like BNY Mellon are well-positioned to benefit from the growing demand for secure and regulated services, especially since non-bank providers charge higher fees for digital asset custody.
Positioning for Future Growth
By expanding crypto custody services beyond Bitcoin and Ether, BNY Mellon could capitalize on the growing interest in digital assets. Their regulated, secure structure offers an advantage in a market that values asset protection.
Final Thoughts on Crypto Custody Expansion
As the crypto market grows, BNY Mellon’s flexible custody model sets a standard for secure, regulated services. With potential to expand beyond Bitcoin ETFs, the bank is well-positioned to lead the charge in digital asset protection.
Disclaimer:
The information provided on 13Desk is for informational purposes only and should not be considered financial advice. We strongly recommend conducting your own research and consulting with a qualified financial advisor before making any investment decisions. Investing in cryptocurrencies carries risks, and you should only invest what you can afford to lose. 13Desk is not responsible for any financial losses incurred from your investment activities.
