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BNY Mellon commits to digital assets custody and administration with new unit

BNY Mellon said it plans to offer its new digital assets custody and administration services later this year .

BNY Mellon has set up a new unit dedicated to building the industry ’ s first integrated multi-asset digital custody and administration platform to cater for the rapidly evolving digital assets space . The team will be led by Mike Demissie , head of advanced solutions at BNY Mellon , and will be responsible for accelerating the development of enterprise solutions for digital assets , including cryptocurrencies . BNY Mellon said it plans to offer its new digital assets custody and administration services later this year . “ BNY Mellon is proud to be the first global bank to announce plans to provide an integrated service for digital assets ,” said Roman Regelman , CEO of Asset Servicing and head of digital , BNY Mellon . With activity in the digital and crypto assets taking off dramatically over recent months , many institutional investors have still been held back from entering the space due to the lack of traditional and established service providers in the market . According to a survey of 800 institutional investors from Fidelity in June last year , over a third of US and European respondents have included digital assets in their investment portfolio . A further 60 % of investors , including family offices , pension funds , hedge funds , and high net worth investors , said they are open to adding digital assets to their future investments . Subsequently , custodians have faced calls to prepare for a service offering should the regulatory , legal and risk frameworks come into place for investing in digital assets . “ Clients prefer to work with a trusted service provider that they have been relying on for all of their traditional assets , and don ’ t want to go elsewhere to gain exposure . What makes our offering more compelling is they can use the full offering of the franchise , starting with custody ,” Demissie told Global Custodian . The new unit plans to provide an infrastructure to service the entire trade lifecycle of a digital asset , including issuance , transferring and safekeeping . It will leverage BNY Mellon ’ s advanced solutions such as blockchain – the technology behind digital assets – while also looking at ways to improve custody and other investment services , as well as its asset management offerings . “ The offering we have designed is not separate to our traditional offering , as it is fully interoperable with our other capabilities across collateral management , issuance services and securities lending ,” Caroline Butler , head of custody for BNY Mellon , told Global Custodian “ We view it as an obligation to offer this service , and this asset class is becoming more mainstream alongside traditional assets . Clients don ’ t want to have bifurcated services that don ' t come with the same amount of trust which they have put into BNY . It is important that we build that bridge between the old and new and have a fully-embedded service across the two platforms .” BNY Mellon made its first foray into the digital asset servicing space in 2019 through a partnership with Bakkt , the digital currency exchange operated by Intercontinental Exchange ( ICE ), to set up private key storage . The launch of the service comes as other custodians have stepped up their involvement in the digital assets space . In December last year , Standard Chartered and Northern Trust announced they would partner to launch a separate entity called Zodia that would offer cryptocurrency custody services for institutional investors . Meanwhile , State Street has invested in crypto technology provider Lukka and also launched a digital asset back-office reporting pilot in collaboration with crypto exchange Gemini Trust .

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