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The crypto space keeps growing as the oldest bank in the United States, BNY Mellon, and payments giant Mastercard is set to offer crypto services across their network, leading cryptocurrencies to be treated like any other asset.
By Kevin Helms
The Bank of New York Mellon, BNY Mellon, has set up a digital asset unit. The oldest bank in the U.S. plans to “hold, transfer, and issue” bitcoin and other cryptocurrencies on behalf of its clients. The bank aims to eventually treat cryptocurrencies like any other assets.
The oldest bank in the U.S., BNY Mellon, announced Thursday “the formation of a new enterprise digital assets unit that will accelerate the development of solutions and capabilities to help clients address growing and evolving needs related to the growth of digital assets, including cryptocurrencies.”
BNY Mellon is a global investments company with a presence in 35 countries. As of Dec. 31, 2020, the bank had $41.1 trillion in assets under custody and/or administration, and $2.2 trillion in assets under management, according to its website.
“BNY Mellon is proud to be the first global bank to announce plans to provide an integrated service for digital assets,” said Roman Regelman, the bank’s CEO of Asset Servicing and head of Digital. “Pending further evaluations and approvals, we expect to begin offering these innovative and industry-shaping capabilities later this year.”
The team will be led by Mike Demissie, head of Advanced Solutions at BNY Mellon. He commented:
The digital assets unit plans to deliver a secure infrastructure for transferring, safekeeping and issuing digital assets.
“Enabling the use of digital assets is critical to transforming the future of custody,” said Caroline Butler, BNY Mellon’s head of Custody. “Our digital asset capabilities should help evolve the way the financial industry operates, including custody, collateral management, issuance, investment management and other segments.”
While the bank’s official announcement does not mention which cryptocurrencies will be supported, the Wall Street Journal reported the bank “will hold, transfer and issue BTC and other cryptocurrencies on behalf of its asset management clients.” The bank further plans to eventually treat digital currencies like any other assets.
Regelman explained that “Digital assets are becoming part of the mainstream,” noting that “Until now, those money managers have had to use separate custodians for their cryptocurrency holdings.”
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By Kevin Helms
Payments giant Mastercard has announced that it is preparing to allow a number of cryptocurrencies to move through its network directly. Customers, merchants, and businesses will no longer need to convert cryptocurrencies into fiat currencies to transfer through the Mastercard network.
Mastercard announced Wednesday that it will start “bringing crypto onto its network.” In a blog post on the company’s official website, Raj Dhamodharan, Executive Vice President of Digital Asset and Blockchain, explained that “digital assets are becoming a more important part of the payments world.” He noted that customers are using Mastercards to buy cryptocurrencies, especially during bitcoin’s bull runs, elaborating:
We are preparing right now for the future of crypto and payments, announcing that this year Mastercard will start supporting select cryptocurrencies directly on our network. This is a big change that will require a lot of work.
“We will be very thoughtful about which assets we support based on our principles for digital currencies,” the executive emphasized, adding that the same standard applies to stablecoins. “We are here to enable customers, merchants and businesses to move digital value,” he opined.
Dhamodharan pointed out that Mastercard is involved in a number of crypto projects, having teamed up with Wirex and Bitpay last year to create crypto cards that allow people to transact using their cryptocurrencies. The company then joined forces with crypto exchange LVL this year. “These relationships — with many more planned in the pipeline — build on our many years of crypto collaborations,” he said.
Even though Mastercard is involved in a number of crypto projects, Dhamodharan said that “cryptocurrencies still don’t move through our network. Our crypto partners convert the digital assets on their end to traditional currencies, then transmit them through to the Mastercard network.” He continued:
Our change to supporting digital assets directly will allow many more merchants to accept crypto — an ability that’s currently limited by proprietary methods unique to each digital asset.
This change will also cut out inefficiencies, letting both consumers and merchants avoid having to convert back and forth between crypto and traditional [fiat currencies] to make purchases.
Lastly, Dhamodharan said that his company is “actively engaging” with several major central banks worldwide as they explore central bank digital currencies (CBDCs). “Last year, we created a test platform for these banks to use these currencies in a simulated environment,” he noted, adding that Mastercard already has “one of the payments industry’s biggest blockchain patent portfolios to draw from to make these projects successful.”
Commenting on the Mastercard news, bitcoin bull Mike Novogratz tweeted: “The Mastercard news is huge. A few months ago it would have been all the crypto community would focus on for the ensuing month. Now we are getting so much good news it almost goes unnoticed. Let me repeat. It is huge news. Crypto adoption is here.”
Recently, Mad Money host Jim Cramer said that Mastercard, along with Paypal and Elon Musk’s Tesla, is driving bitcoin more into the mainstream. Tesla revealed Monday that it has put $1.5 billion into bitcoin.
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