BNY Mellon to Expand Digital Asset Services in Asia

BNY Mellon, the oldest bank in the US and a global leader in custodial services, plans to offer custodial services for tokenized securities and crypto assets in Asia, according to the bank's president and CEO Robin Vince.

The move is part of BNY Mellon's expansion in the digital asset space, which Vince sees as a new growth area for the bank, according to a report by Nikkei Asia.

BNY Mellon, which has US$44.3 trillion in assets under custody or administration, is embracing information technology to reduce costs and stay ahead of industry competition.

Demand for services

Vince noted that over the next several decades, more assets will exist in tokenized form and be managed on blockchains. As the world's largest custodian, BNY Mellon wants to be a part of that revolution, he said.

In 2021, BNY Mellon established a specialized section for the bank's digital asset business, and in October 2022, became the first American bank to launch a domestic custody service for digital assets.

The bank plans to analyze demand among institutional investors before bringing the service to additional markets, but Asia has been earmarked as a key focus area.

"Digitization is an important theme here in Japan," Vince told the publication, "and it's important for our business globally. And that's where being a scale platform really helps."

A recent BNY Mellon-sponsored survey noted that almost all institutional investors (91%) are interested in investing in tokenized products.

Additionally, 41% of institutional investors hold cryptocurrency in their portfolio today, with an additional 15% planning to hold digital assets in their portfolios within the next two to five years.

Related investments

BNY Mellon previously invested in Fireblocks, a provider of cryptocurrency custodial services, and jointly developed technology to safeguard digital assets with the firm.

In 2021, BNY Mellon also announced that it would be using the cloud-based, blockchain-powered platform of the Marco Polo Network, a digital trade finance consortium, which would allow it to both provide financing and gain real-time visibility into trade finance instruments and their statuses.