• BNY Mellon offers platform for digital and traditional assets
• Study among institutional investors shows interest in digital assets
• Michael Demissie: “Digital assets are here to stay”
Last November, for example, the major US bank JPMorgan successfully carried out its first cross-border transaction with Decentralized Finance (DeFi) on a public blockchain, and Goldman Sachs showed interest in buying or investing at the end of last year in view of the lower valuations caused by the FTX debacle in crypto companies.
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BNY Mellon offers custody of digital and traditional assets on the same platform
The Bank of New York Mellon is also interested in the new technologies and the opportunities they offer. In early 2022, the US bank announced a partnership with blockchain data platform Chainalysis to help track and analyze its customers’ crypto transactions. Then, in October 2022, the financial institution launched a digital custody platform to protect the ether and bitcoin holdings of select institutional clients, making BNY Mellon the first major US bank to offer custody of digital assets and traditional investments on the same platform.
In early February, BNY Mellon appointed Caroline Butler, who previously served as CEO of Custody Services, leading the development of the integrated digital custody and administration platform for traditional and digital assets, as CEO of Digital Assets. She now leads BNY Mellon’s commercial digital asset initiatives worldwide.
Study among institutional investors
BNY Mellon CEO Robin Vince cited customer demand as the reason for launching the institutional crypto services in October last year.
A 2022 BNY Mellon survey of 271 global institutional clients found that 70 percent of respondents would expand their digital asset activity if services such as custody and execution were available from recognized, trusted institutions. The study also shows that 88 percent of respondents plan to continue with their plans around digital assets – despite the collapse in the crypto market – and that 91 percent of institutional investors are interested in investing in tokenized products. 97 percent of respondents agreed that tokenization will revolutionize asset management and is “good for the industry.”
Customers are interested in digital assets
Given these results, Michael Demissie, Head of Advanced Solutions at BNY Mellon, said he was confident about the future of digital assets despite the crypto market’s plunge last year: “Even in the face of recent market volatility, our conviction remains strong and we retain the long-term opportunities and… the transformational potential of the underlying technology,” he wrote in last year’s study.
In his opinion, more in-depth regulation is necessary: ”It’s important that we navigate this space responsibly,” says Demissie. “We absolutely need clear regulations and rules to guide the way. We need responsible players who can offer reliable services that live up to the trust of investors.”
But on a cryptocurrency panel at Afore Consulting’s 7th Annual FinTech and Regulatory Conference, Demissie explained, as Reuters reports, “What we’re seeing is that, by and large, clients are absolutely keen on digital assets.” According to him, digital assets are “here to stay”.
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