Bank of New York Mellon, the nation’s oldest bank, said Thursday that it will begin financing bitcoin and other digital currencies.
The custody bank will eventually allow digital currencies to pass through the same financial network it currently uses for more traditional holdings like U.S. Treasury bonds and equities after months of analysis of its prototype digital asset framework.
“BNY Mellon is proud to be the first global bank to announce plans to provide an integrated service for digital assets,” Roman Regelman, CEO of asset servicing and head of digital at BNY Mellon, said in a press release.
“Growing client demand for digital assets, maturity of advanced solutions, and improving regulatory clarity present a tremendous opportunity for us to extend our current service offerings to this emerging field,” he said.
The BNY Mellon executive added that, pending product analysis and approvals, the bank should begin offering the services to its customers later this year. The Wall Street Journal first reported the bank’s cryptocurrency announcement.
Shares of BNY Mellon rose 2% in premarket trading following the news.
The move represents a significant step by the country’s most prominent custodian banks, which specialize in the protection of the financial assets of customer businesses and individuals.
In the past, major custodian banks expressed concerns over potential regulatory or legal risks involved in banking the cryptocurrency market. But as prices of bitcoin and other digital assets have continued to rise, they have become more popular with asset managers, hedge funds and other institutional investors.
Bitcoin, off to a robust start to 2021, was up 7.7% to around $48,250 at 8:30 a.m. in New York, according to Coin Metrics. The digital currency has rallied more than 60% since the start of the year.
Individual investors and businesses alike have grown more comfortable with digital currencies as high-profile business leaders including Tesla CEO Elon Musk throw their weight behind a handful of assets.
Tesla disclosed earlier this month that it purchased $1.5 billion worth of bitcoin for “more flexibility to further diversify and maximize returns on our cash.”