BNY Mellon to Collaborate With Interbank Marketplace Pure Digital

BNY Mellon joins State Street to help build front-to-back office solution for transacting digital assets

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key takeaways

  • Pure Digital to offer institutional investors a market for digital assets and cryptocurrencies with physical delivery and bank custody
  • Banks working together an indication of “significant joint challenges and market change,” industry executive explains

BNY Mellon is the latest bank set to collaborate with Pure Digital, an interbank marketplace for cryptocurrency price discovery and exchange of wholesale risk, to develop a platform for transacting digital assets.

Jason Vitale, global head of foreign exchange at BNY Mellon, said in a statement that digital assets will continue to become more embedded in global markets, noting that this collaboration aligns with the company’s wider strategy to develop a digital asset capability for clients across the entire trade life cycle.

The news comes after BNY Mellon, which has $45 trillion assets under custody, formed a digital assets unit in February. The Wall Street goliath revealed at the time that it was developing a client-facing prototype that is designed to be the industry’s first multi-asset digital custody and administration platform for traditional and digital assets.

“BNY Mellon is one of the oldest and most widely respected financial institutions in the country, so its commitment to developing digital asset capabilities for its clients speaks volumes to the maturation of the crypto ecosystem as a whole,” Unstoppable Domains co-founder Brad Kam told Blockworks. “Banks need to innovate to compete, and those that haven’t announced plans to introduce crypto offerings are likely already working on plans and partnerships behind the scenes.”

BNY Mellon joins State Street’s Currenex unit, which Pure Digital selected in April to provide the trading infrastructure for its newly launched wholesale digital currency trading platform. 

“I think that the move by BNY Mellon is telling in that they’ll be working with other banks,” said Jason Mochine, director of Marchare, a sales consultancy specializing in FinTech within the capital markets and digital asset arenas. “The only time the banks agree to play together is when they are facing significant joint challenges and market change.”

State Street, which has about $40 trillion under custody, has pushed further into the cryptocurrency space since announcing its partnership with Pure Digital by launching a new division focused on the shift to digital finance last month. State Street CEO Ron O’Hanley has called digital assets “a trend that’s here to stay.”

Fidelity’s digital assets division was reportedly looking to increase headcount as part of a push to leverage DeFi, tokenized assets and other blockchain capabilities. Bank of America launched a cryptocurrency research effort earlier this month and was reportedly starting to allow certain clients to trade bitcoin futures.

“Undoubtedly all banks will end up having to connect to infrastructure that can handle traditional and digital assets as the latter matures and, over time, replaces the former,” Mochine told Blockworks.

The Pure Digital platform will be a fully automated, high throughput OTC market for digital assets and cryptocurrencies with physical delivery and bank custody, the firm has explained. Its final platform, which is subject to regulatory approval, will leverage the firm’s FX trading industry infrastructure to offer users with stability, security, transparency and capital efficiency, the firm explained.

“As more top-tier banks join our initiative, we move closer to having an efficient wholesale crypto market,” Pure Digital CEO said in a statement, “which will ultimately lead to a more stable and mature asset class.” 

A BNY Mellon spokesperson declined to comment and a representative for Pure Digital did not immediately respond.

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