Oldest US bank BNY Mellon to hold Bitcoin for clients

The oldest bank in America, Bank of New York Mellon (BNY Mellon), said Thursday that it will now be accepting, holding and issuing bitcoin for its clients.

The Wall Street Journal reports that BNY Mellon will eventually let digital assets to be moved through the same system that managers use for more traditional holdings through a new platform that is currently in prototype.

“Digital assets are becoming part of the mainstream,” Roman Regelman, chief executive of BNY Mellon’s asset-servicing, told the Journal.

BNY Mellon will reportedly begin offering this new service later this year.

The Journal notes that this is a significant move for a Wall Street bank, with many other institutions skeptical of accepting digital currencies due to concerns over the regulatory risks involved. However, bitcoin’s rising value has caused many to start accepting the relatively new cryptocurrency.

Regelman noted to the Journal that before this development, banks had used separate custodians for cryptocurrency holdings.

BNY Mellon is not the first major financial institution to allow bitcoin to be used, the Journal notes. Fidelity Investments in 2018 announced that it would be storing and trading digital currencies such as bitcoin and ether.

Mastercard also announced on Wednesday that it will start supporting cryptocurrencies. The company said the move was not meant to encourage others to start using digital currencies but to enable customers to transfer all digital value “however they want.”

“This change may open merchants up to new customers who are already flocking to digital assets, and help sellers build loyalty with existing customers who want this additional option,” Mastercard said in a post explaining its decision.

It was reported on Monday that Tesla CEO Elon Musk had invested $1.5 billion into bitcoin. After the news of Tesla’s investment broke, bitcoin’s value rose to an all-time high of $43,863.