The bulk majority of Bank of New York Mellon’s clients are interested in investing in digital assets despite the recent market meltdown.
Citing a 2022 study of the custodian bank’s clients, BNY Mellon’s head of advanced solutions Michael Demissie said clients are “absolutely interested” in digital assets. He argued that digital assets are “here to stay” despite the 2022 market crash that led to the collapse of some major crypto companies.
“What we see is clients are absolutely interested in digital assets, broadly,” Demissie said, speaking on a panel on cryptocurrency at Afore Consulting’s 7th Annual FinTech and Regulation Conference.
However, Demissie noted that a functioning regulatory framework and reliable services that live up to investors’ trust are required. “It’s important that we navigate this space in a responsible way,” he said.
The BNY Mellon survey, conducted in October last year, revealed that 91% of the bank’s institutional investors are interested in investing in digital assets with 97% claiming that “tokenization will revolutionize asset management” and will be “good for the industry.”
Furthermore, 70% of the bank’s clients said they would increase their digital asset activity if services like custody and execution become available from recognized, trusted institutions. Another 88% of the bank’s clients said they are moving forward with their plans despite the 2022 market crash.
Earlier this year, Robin Vince, the CEO of BNY Mellon, said the bank is committed to continuing the exploration of digital assets during an earnings call. The chief executive officer identified cryptocurrencies as the bank’s “longest-term play”.
Vince said that he does not believe cryptocurrencies will become a major source of revenue for the bank in the near future. According to the CEO, they are expecting digital assets to be negligible from a revenue point of view for maybe another five full years.
While calling cryptocurrencies the bank’s “longest-term play”, Vince acknowledged that ignoring digital assets “would be like being the custodian of 50 years ago and sticking with paper and not adopting a computer” but also added that any investments made in the sector are done both carefully and deliberately.
He also addressed some unfortunate events that shook the crypto world last year, including the unprecedented collapse of FTX, once the third-largest crypto exchange in the world that filed for bankruptcy in November last year, saying that these only highlight “the need for trusted regulated providers in the digital asset space.”
BNY Mellon is an American investment banking services holding company headquartered in New York City and has been historically friendly toward digital assets. In 2022, the bank received authorization from New York’s banking regulators to accept Bitcoin and Ether deposits from chosen customers.