America’s oldest bank BNY Mellon follows suit by introducing Bitcoin custodial services
An amazing week for Bitcoin has become even better as America’s oldest bank, BNY Mellon, jumps on board the crypto bandwagon. According to the Wall Street Journal, The U.S. investment bank said it would hold, transfer, and issue Bitcoin and other cryptocurrencies for its clients.
The Bitcoin trickle is turning into a flood
Recently, it seems as though a flood of companies is getting on board with cryptocurrency. Tesla’s $1.5bn Bitcoin buy is perhaps the most significant coup to date.
But a whole new dynamic comes into play with BNY Mellon joining in. Generally, banks have been the most prominent skeptics of cryptocurrency. Why? Because cryptocurrency is a threat to their operations.
Demetrios Zamboglou, the COO at forex brokers CFI Financial Group, said blockchain technology is fast turning the world of finance upside down. This presents a frightening prospect to firms that have had it good for so long.
“The prime reason why banks are worried about blockchain technology is the fact that innovative fintech products threaten the monopoly banks currently operate on a global level. Moreover, blockchains are fuelling industry-wide change, while banks are absolutely terrified of changing given their largesse and cumbersome operations.”
But as Bitcoin continues on its journey upwards, the naysayers are gradually becoming quieter. More importantly, the heightened demand for cryptocurrency has previously skeptical bankers reconsidering their position.
Roman Regelman, the Chief Executive of Asset-Servicing and Digital Businesses at BNY Mellon, admitted things are changing.
“Digital assets are becoming part of the mainstream.”
Mastercard wants in as well
Regelman’s message rings true for payments giant Mastercard, who, like rival firm Visa, voiced their doubts about cryptocurrency in the past.
In 2018, Mastercard CEO Ajay Banga called cryptocurrency junk. He added that a wildly fluctuating value does not fit the description of a store of value. Nonetheless, over time, Mastercard did begin to soften its stance towards cryptocurrency.
Yesterday it announced it would support “select” cryptocurrencies directly on its network. The firm says its approach is to offer customers the choice to use it if they wish.
“Our philosophy on cryptocurrencies is straightforward: It’s about choice… It should be your choice, it’s your money.“
Don Guo, the CEO of Broctagon Fintech Group, said acceptance of Bitcoin from institutional players of the caliber of BNY Mellon, Mastercard, and Tesla would no doubt entice others to follow.
“NY Mellon’s and Mastercard’s introduction to the cryptocurrency space, following the recent Tesla news, signals another price boom for Bitcoin. Such a big institutional endorsement will propel digital assets even further into the main stage this year, and we expect further uptake as a result of the mainstream attention.”
Guo added that the underlying issues in cryptocurrency still exist. But he expects the advent of major institutional players to bring a level of maturation to the sector.
