- BNY Mellon reportedly received SEC approval to offer crypto custody services for institutional clients, as Chris Land confirmed during a Wyoming public hearing.
- However, BNY Mellon would have to work with state regulators for asset protection in case of bankruptcy.
- There is a growing institutional adoption of crypto, with BlackRock and other leading TradFi companies embracing Bitcoin and blockchain technology.
It seems that BNY Mellon, one of the largest custodian banks in the US, has reportedly received the green light from the SEC to offer crypto custody services to institutional clients.
Chris Land, general counsel for US Senator Cynthia Lummis, shared this update during a recent public hearing in Wyoming. BNY Mellon’s move is seen as a significant step toward broader institutional acceptance of cryptocurrencies.
Related: Bitcoin Accepted: Louisiana Allows BTC, USDC Payments for State Services
The SEC’s chief accountant, Paul Munter, confirmed that conditional exemptions to SAB 121 have been granted to a bank and several brokerage firms, although BNY Mellon was not directly named.
The exemption for BNY Mellon comes with conditions, such as working with a state regulator to ensure customer assets are protected in case of bankruptcy and restricting activities to institutional custody with strong risk management.
The bank — which is regulated by the Federal Reserve and New York’s Department of Financial Services — may also challenge the requirement to obtain a New York BitLicense by arguing federal preemption over state laws.
Michael Saylor also shared the news on his X account. And, of course, Peter Schiff had to chime in, saying: “Defeating the entire concept of self-custody and moving away from the banks.”
Bitcoin Institutionalised
Could this development pave the way for other banks to explore similar opportunities for crypto custody services? Too early to say, but institutions are surely moving fast with digital assets and blockchain technology.
For instance, the SEC also approved the listing and trading of options off BlackRock’s iShares Bitcoin Trust ETF on the Nasdaq. This means options based on a Bitcoin index, which could help stabilise BTC’s volatility through better price discovery and hedging strategies.
Related: Franklin Templeton and Citigroup Embrace Solana for Cutting-Edge Financial Innovations
Just recently, Franklin Templeton and Citigroup took centre stage (separately) to announce their intentions of using the Solana blockchain for their upcoming financial services. This was announced during Solana’s Breakpoint, a multi-day event held in Singapore.
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