“The Bank of New York Mellon with AUM of $50 trillion plans to enter the market of custodial services of spot exchange-traded funds based on Bitcoin and Ethereum. This was reported to Bloomberg by representatives of the bank. The agency noted that such a move would jeopardize Coinbase’s dominant position. The Bitcoin exchange is the custodian of most products. Exceptions are the Fidelity and VanEck funds. In the latter case, Coinbase is an additional partner. Storage services, according to Bloomberg […]”, — write: businessua.com.ua
The Bank of New York Mellon of AUM in $50 trillion plans to enter the market of custodial services of spot exchange funds based on Bitcoin and Ethereum. This is Bloomberg bank representatives reported.
The agency noted that such a move would jeopardize Coinbase’s dominant position.
The Bitcoin exchange is the custodian of most products. Exceptions are the Fidelity and VanEck funds. In the latter case, Coinbase is an additional partner.
According to Bloomberg, cryptocurrency storage services can cost up to 10 times more compared to TradFitaking into account the risks associated with their security.
The digital asset storage market is estimated at $300 million with the potential for annual growth of 30%.
BNY Mellon gets regulatory approval to launch crypto custodial service in 2022, but legal restrictions in form of bulletin SAB 121 from SEC made the implementation of this initiative problematic.
The document actually made it commercially unprofitable to store customers’ digital assets.
“A review conducted by the agency’s Office of the Chief Accountant found no complaints regarding BNY’s proposal not to reflect crypto-ETF collateral on the organization’s balance sheet,” the statement said.
In addition to the Commission, the approval of other regulators with whom BNY is in dialogue will be required.
The SEC issued SAB 121 in April 2022. In February 2024, four industry organizations asked to soften the provisions of the document. Department Commissioner Hester Pearce called the Bulletin and related verbal recommendations from management a “noxious weed.”
Previously, Senator Cynthia Lummis and Congressman Patrick McHenry drew attention to the increased risks of losing client funds due to the collapse of a crypto custodian during the implementation of the rule.
It will be recalled that in May the Senate supported the resolution repealing SAB 121. The lower house of the US Congress passed the bill.
Congress failed to override President Joe Biden’s veto of SAB 121 in July.
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