New York, kSaturday, September 28, 2024 – BNY Mellon, America’s oldest bank, is making strides toward offering custodial services for bitcoin and ether held by exchange-traded fund (ETF) clients, according to Bloomberg.
This development could challenge Coinbase’s dominance in the crypto custody market.
The progress comes after a review by the U.S. Securities and Exchange Commission’s Office of the Chief Accountant allowed BNY Mellon to avoid treating cryptoassets as a balance-sheet liability. The SEC reportedly granted the bank an exemption from Staff Accounting Bulletin 121 (SAB 121), which opened the path for BNY Mellon to offer these services.
This move could threaten Coinbase, which currently dominates the crypto custody space by handling U.S. spot bitcoin ETFs, including BlackRock’s offering. The crypto custody market is estimated to be worth $300 million, growing at a 30% annual rate.
BNY Mellon has been vocal about its long-term commitment to digital assets. As of early 2024, the bank supports 80% of SEC-approved bitcoin and ether exchange-traded products through its fund services business.
With the bank’s entrance into the crypto ETF custody market, competition with existing custodians like Coinbase is expected to intensify. BNY Mellon’s deep involvement in traditional finance could make it a formidable player in the digital assets space.
Bloomberg Report can be reached here https://www.bloomberg.com/news/articles/2024-09-24/bny-plans-to-custody-crypto-for-etfs-after-sec-review?embedded-checkout=true&sref=QkiN9npb
