Bank of New York Mellon Corp., the nation’s oldest bank, announced thursday it will “hold, transfer and issue bitcoin and other cryptocurrencies on behalf of its asset-management clients,” WSJ reports.
Why It Matters: BNY Mellon’s move represents a huge step for Wall Street’s back-office banks, “whose concerns over regulatory, legal and stability risks left them reluctant to come into direct contact with crypto markets.” But Bitcoin and other digital assets remain on the rise, and have grown in popularity among those in the finance space. Once BNY Mellon started getting requests, it was only a matter of time.
Not The First: Fidelity Investments also announced a similar plan more than two years ago. In October 2018, the financial firm revealed plans to manage bitcoin and ether and “a year later won regulatory approval to operate its crypto business in New York.”
- Outside the banking industry, companies are getting involved. Elon Musk, earlier this month, said Tesla would accept Bitcoin to purchase electric vehicles and also revealed the purchase of $1.5 billion in the cryptocurrency for its corporate treasury.
“But BNY Mellon’s announcement marks the first time one of the big custody banks has unveiled a road map for treating digital currencies as any other asset. And the bank hasn’t put limits on the kinds of digital assets it will allow clients to store there.”
- Until now, money managers have had to use separate services to manage their cryptocurrency holdings.
- “Bitcoin’s price soared past the $48,000 level for a second time this week.”
Looking Ahead: BNY Mellon plans to enact its digital currency features later in 2021. Bitcoin and other currencies are taking a leap forward. But they are still extremely volatile, which limits their use in daily transactions.
The structural revolution continues, one step at a time. I care much more about news pieces like this than I do the daily price of bitcoin. Confidence in fundamentals is the only way to truly have the proverbial “diamond hands”.