BNY Mellon already holds more than USD 41 billion worth of assets in custody and plans to provide cryptocurrency services. Israel-based firm Fireblocks offers custody of cryptocurrencies to around 230 customers, including BNY Mellon and five other banks.

Currently, the Bank of New York Mellon (BNY Mellon), the oldest in the United States, is investing in Fireblocks. The technology of this Israeli firm will allow it to provide cryptocurrency custodial services on behalf of institutional investors.

According to the Wall Street Journal (WSJ), Fireblocks completed a financing round of USD 133 million in which BNY Mellon participated. Hedge fund firm Coatue Management and venture capital firms SVB Capital, Ribbit Capital, and Stripes joined the bank.

The Bank Offers Custody of Bitcoin and Other Cryptocurrencies

On February 11th, BNY Mellon revealed its Bitcoin custody plans. The entity already holds more than USD 41 billion worth of securities in custody. At that time, they had already been discussing with their customers about this service focused on Bitcoin and other cryptocurrencies.

BNY Mellon Chief Executive Officer of Asset Services and Head of Digital Unit Roman Regelman expressed his opinion on this matter. The executive says that developing products to link digital and traditional assets is critical to the future of custody.

In a statement, Fireblocks said that it began offering custodial services to cryptocurrency exchanges and institutions three years ago. They maintain that they have formed an institutional transfer and storage network in which they safeguard more than USD 400,000 million worth of cryptocurrencies.

Other Multinational Banks Invest in Custodial Services

The institution says that it has around 230 customers, including exchanges, liquidity providers, banks, and hedge funds, among others. Fireblocks co-founder and CEO Michael Shaulov said that they are working with five other multinational banks, apart from BNY Mellon. However, they declined to identify those financial institutions, according to the WSJ.

Shaulov said that he had worked with an Israeli military intelligence agency similar to the US National Security Agency (NSA). The other two co-founders also held similar positions in intelligence.

The CEO of Fireblocks explained that his experiences in the intelligence unit were highly relevant to his career in cybersecurity. In that sense, he commented that it is necessary to understand how attackers function or operate in their most advanced capacity. He believes that this gives an advantage in understanding how to build defense systems.

The proposed custody solutions are just one reason for BNY Mellon’s interest in Bitcoin. The financial institution said that it will also trade on Nasdaq alongside Simplify US Equity PLUS Bitcoin. The latter has requested approval from the SEC to invest in Bitcoin, indirectly, through the Grayscale Bitcoin Trust (GBTC) fund. In this case, BNY Mellon would act as the administrator, agent, and accountant of this Bitcoin investment initiative.

The relevance of cryptocurrencies, especially Bitcoin, has grown to such an extent that even banks have included them in their services. These financial institutions are becoming increasingly aware of the strength that these digital assets are gaining in the market.

By Alexander Salazar

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