Bank of New York Mellon is now the first large American bank to safeguard customers’ cryptocurrency assets alongside traditional investment assets.
The world’s biggest custody bank announced through a press release that they will now also provide custody service for cryptocurrency assets. The bank will store the private keys required to access and transfer the assets.
This move is significant for large crypto fund managers because they will no longer need the custody of their crypto assets with a crypto specialist. They can manage their portfolio of traditional investment assets along with cryptocurrency assets from a single destination.
Investment management firm SkyBridge shared on its Twitter handle that this move is a huge step and doesn’t feel like it is in the middle of a bear market.
The wave of crypto adoption.
The institutional adoption of digital assets is on the rise. While many await regulatory clarifications, some enterprises are already neck-deep into digital assets. In most cases, it is due to the high demand from clients for crypto services that pushes them toward adoption.
Earlier this year, American investment banking company, Goldman Sachs, created a Bitcoin-backed cash loan product. This service will enable clients to keep their Bitcoin holdings as collateral to receive a loan from the bank.
BlackRock, the world’s largest asset management firm, has partnered with Coinbase Global to offer crypto services, allowing its institutional client base to access crypto. BlackRock has over $10 trillion in assets under management.
Second largest stock exchange in US offers crypto custody services.
Last month, the owner and operator of the second largest stock exchange in the US, Nasdaq, jumped on the bandwagon to offer custody services of Bitcoin and Ethereum to institutional investors.
Nasdaq believes that custody is the foundation. They also look forward to expanding their crypto offerings by developing other solutions and offering execution and liquidity services.
Not your keys, not your cryptos?
While some celebrate the adoption by institutions to provide custodial services for digital assets, there are concerns from a part of the community that there is no need for banks to custody the Bitcoin. A user expressed through Twitter that they believe this is a step backward for decentralization.
What are your opinions on the institutional adoption of cryptocurrencies?
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