Following the news that BNY Mellon has launched its own digital assets custodian platform, allowing some of its US clients to store and trade Bitcoin and Ethereum;

Chris Dinga, Payment Analyst at GlobalData, a leading data and analytics company, offers his view:

“The growing interest in the cryptocurrency sector is motivating institutions such as BNY Mellon to expand their exposure to the sector. According to GlobalData’s report, ‘Innovation in Blockchain Payments’, the global blockchain market was valued at $4 billion in 2020, and is expected to grow at a compound annual growth rate (CAGR) of more than 47% between 2020 and 2030.

“By providing digital asset custodian platforms to its clients, BNY Mellon will be competing with established cryptocurrency exchanges such as Binance and Coinbase. While there has been interest from institutional investors that are keen to gain exposure to the cryptocurrency sector, some investors have been hesitant to invest due to the lack of regulations and the security concerns. By integrating blockchain technology within its infrastructure, BYN Mellon will be able to attract such hesitant investors. According to GlobalData’s Financial Services Consumer Survey 2022, 77%* of respondents reported using cryptocurrencies as an investment.

“With growing interest around decentralized finance (DeFi), BNY Mellon is likely to provide additional services to its clients besides digital asset custodian services. There are opportunities for BNY Mellon to provide bitcoin-backed loans and exposures to crypto exchange-traded fund (ETF) investments to clients.”

*The Financial Services Consumers Survey is conducted yearly by GlobalData and its 2022 survey covers 44 countries with 50,000 respondents.