BNY Mellon CEO on Crypto: ‘Prepared’ To Support Client Needs ‘On This Important Journey’

BNY Mellon CEO on Crypto: ‘Prepared’ To Support Client Needs ‘On This Important Journey’

On Monday (October 17), during the Q3 2022 earnings call, Robin Vince, the President and CEO of Bank of New York Mellon Corporation (NYSE: BK) shared his thoughts on crypto.

As you may already know, on October 11, BNY Mellon announced that its Digital Asset Custody platform had gone live in the U.S. with “select clients” now able to hold and transfer Bitcoin ($BTC) and Ethereum ($ETH).

At the end of Q2 2022, BNY Mellon had “$43.0 trillion in assets under custody and/or administration, and $1.9 trillion in assets under management.”

According to the press release, BNY Mellon, which is one of the oldest banks in the world (having been established in 1784), “formed an enterprise Digital Assets Unit in 2021 to develop solutions for digital asset technology, with plans to launch the industry’s first multi-asset platform that bridges digital and traditional asset custody.”

Robin Vince, Chief Executive Officer and President at BNY Mellon, had this to say:

Touching more than 20% of the world’s investable assets, BNY Mellon has the scale to reimagine financial markets through blockchain technology and digital assets. We are excited to help drive the financial industry forward as we begin the next chapter in our innovation journey.

And Roman Regelman, CEO of Securities Services & Digital at BNY Mellon, stated:

With Digital Asset Custody, we continue our journey of trust and innovation into the evolving digital assets space, while embracing leading technology and collaborating with fintechs.

According to a survey that BNY Mellon sponsored, “almost all institutional investors (91%) are interested in investing in tokenized products” and furthermore “41% of institutional investors hold cryptocurrency in their portfolio today, with an additional 15% planning to hold digital assets in their portfolios within the next two to five years.”

The press release went on to say that BNY Mellon had collaborated with Fireblocks and Chainalysis to “integrate their technology in order to meet the present and future security and compliance needs of clients across the digital asset space.”

Caroline Butler, CEO of Custody Services at BNY Mellon, said:

As the world’s largest custodian, BNY Mellon is the natural provider to create a safe and secure Digital Asset Custody Platform for institutional clients. We will continue to innovate, embrace new technology and work closely with clients to address their evolving needs.

Anyway, earlier today, BNY Mellon released its Q3 2022 financial results, and according to a transcript (by Seeking Alpha) of the earnings call that took place at 12:00 p.m. UTC, here is what the BNY Mellon CEO said about his firm’s stance on crypto:

… following the formation of our digital assets unit in 2021, we are now live with our digital asset custody platform in the U.S. To this point, we continue to see significant institutional demand for resilient, scalable financial infrastructure built to accommodate both traditional and digital assets...

And we see digital asset custody as an important foundational capability for the future of financial markets as blockchain technology allows for tokenization of all kinds of assets and currencies. But just to be clear, we did not invest in this space just for the purpose of custodying crypto. We see this as the beginning of a much broader journey…

So one of the things that we did recently was we did a survey of large institutional asset managers, asset owners, hedge funds. About 40% of them already hold crypto in their portfolios. About 75% of them are actively investing or exploring investing in digital assets. But here’s the important stat, which is over 90% of them are interested in investing in some type of tokenized asset within the next few years…

And so what we heard from our clients is they want institutional grade solutions in the space. And the way that we think about the world is, yes, sure, there are cryptos and those are things that are clearly have had a lot of spotlight recently, but we view the tokenization of types of assets, whether they’re traditional financial assets or maybe assets that haven’t been as easy to manage in the financial system, like hard commodities, real estate, forest all sorts of things…

You could think about certificates and with the world of ESG. Some of those things could be much better managed using tokens. And then also tokenized currencies where real currencies, fiat currencies or proxies for fair currencies, we also think could be quite interesting. Now all of this is over the course of the next few years, the actual dematerialization of assets from paper into technology back in the ’60s and ’70s, took a long time to actually happen. It was not coincidentally happening with the rise of computing in business…

Now we’ve got a new technology, the rise of that in business, we think is going to be important but I’m not going to put an exact time scale on it, but its years, maybe it’s even decades for full adoption. But we thought that with a longer-term view this was an important space. Now we’re not spending a ton of money on it, but we’re deliberately investing in smart places in that ecosystem so that we are prepared to be there for our clients over the long-term on this important journey…

Our clients want institutional grade custody and solutions in this space. And I enjoyed the quip that I read in the media maybe a year or so ago, which is, you know what, it’s not a real asset until BNY Mellon say they’ll look after it.

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Featured Image via Pixabay

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