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Read more: BNY Mellon Plans To Integrate Digital Assets Into All Its Business
Following review, the U.S. Securities and Exchange Commission found the BNY Mellon Bitcoin ETF service exempt. The bank would not need to count customer crypto holdings as corporate liabilities-a huge development for traditional financial institutions.
According to a report from Bloomberg, this was under the exemption that the SEC had Staff Accounting Bulletin 121. The bank, after being looked into, was then exempted by the SEC’s Office of the Chief Accountant. Therefore, it held the crypto assets but did not recognize it on its balance sheet as a liability.
A hypothetical BNY Mellon Bitcoin ETF custody service could, in theory, open the door to other large banks that up until now have been extremely cautious in joining the crypto custody market dominated by players native to cryptocurrency, like Coinbase.
BNY Mellon has placed itself in the crypto custody space, particularly in a constantly expanding market. Analysts estimate this crypto custody market at roughly $300 million today but at a growth rate of 30% annually. By 2032, the sector could top $1 billion in value, with an opportunistic opening for institutions like BNY Mellon to take on leading players.
Despite this progress, a few kinks in the regulatory chain persist. Lawmakers take exception to the opinion that the meetings the SEC staff had with private companies lacked transparency.
BNY Mellon’s foray into the crypto space began at the beginning of 2023 when CEO Robin Vince made digital assets a core component of the bank’s future strategy.
Although the company had prepared the needed technical infrastructure to custody digital assets since 2022, the SAB 121 rule delayed the launch of its services. The bank has said it will keep working with regulators to extend its crypto custody services.
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