Banks move ahead with digital asset custody
The digital asset custody space is becoming crowded. Nevertheless, BNY Mellon has gone further than most of its peers in embracing cryptocurrencies.
Competition in the evolving crypto-custody market further intensified in October when BNY Mellon’s digital asset custody (DAC) platform went live in the US. The bank worked with digital asset technology specialists Fireblocks and Chainalysis to develop the platform, which enables selected clients to hold and transfer Bitcoin and Ether.
Research produced by Celent for BNY Mellon found that 41% of the institutional investors surveyed held cryptocurrency in their portfolios, with a further 15% planning to hold digital assets within the next two to five years. More than 90% expressed interested in investing in tokenized assets.
The key issue is the status and responsibility of each player
In excess of two-thirds of survey respondents said they would increase their digital asset activity if services such as custody and execution were available from trusted institutions.
HSBC has also launched a proprietary tokenization platform that financial institutions and corporates will be able to use to issue digital bonds based on distributed ledger technology (DLT).
The platform leverages blockchain technology as a “single source of truth”, whereby asset and settlement tokens sit natively and securely on the platform’s ledger.