BNY Mellon Commits to Long-Term Digital Asset Initiatives

America’s oldest bank, BNY Mellon, is not shying away from digital innovation, rolling out initiatives for digital assets that extend beyond today’s cryptocurrencies.

The bank ventured into the bitcoin market in 2021 — a significant milestone for mainstream adoption of this once-niche asset. 

BNY Mellon declared its intention to securely manage, transfer and facilitate the issuance of bitcoin and other crypto for its esteemed asset-management clientele.

In a recent interview, Roman Regelman, chief executive of BNY Mellon’s asset-servicing and digital businesses, discussed the bank’s commitment to advance initiatives centered around distributed ledger technology (DLT), tokenization and digital cash.

That’s not to say that cryptocurrencies hold the highest priority within the bank’s strategic focus, The American Banker reported on Monday. And CEO Robin Vince, during the bank’s first-quarter earnings call last month, emphasized their deliberate and cautious approach in the crypto realm, characterizing their progress as “exceptionally slow.”

But Regelman told the trade publication that BNY Mellon is now actively pursuing three key initiatives.

First, they are expanding services to include custody and clearing for digital assets, broadening their offerings to encompass new asset classes. “Everything that we do, we want to do for digital assets,” he said.

Second, they are prioritizing the implementation of blockchain and other technology to modernize their infrastructure, enhancing speed, cost-effectiveness and real-time capabilities. 

Lastly, the bank is exploring tokenization as a means to democratize investment opportunities. Blockworks has reached out to the bank for comment.

An October 2022 study sponsored by BNY Mellon notes that an impressive 91% of institutional investors expressed interest in investing in tokenized assets.

Michael Demissie, a managing director at BNY Mellon, said the study reflects “that minds are changing, with traditional investors ready to imagine a world where up to one-third of their portfolios will contain digital assets.”

Regelman expressed a long-term perspective for the bank’s vision, emphasizing that it encompasses multiple timeframes simultaneously. 

But he said that within the next 1.5 years, BNY Mellon plans to undertake several initiatives to expand its existing businesses. 

“In the next year to year and a half, we’re going to do a number of things to take the businesses that we have and extend them to digital assets,” he said.

The CEO highlighted that artificial intelligence plays a pivotal role within the bank’s risk management organization. Furthermore, BNY Mellon has also appointed a dedicated chief risk officer responsible for overseeing digital assets and data as integral aspects of the business.

As of March 31, 2023, BNY Mellon managed $46.6 trillion of assets under custody and $1.9 trillion under management across 35 countries.

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