Michael Saylor, the face behind MicroStrategy, recently shared insights on emerging rumors regarding major banks entering the cryptocurrency sector. His announcement coincided with news from BNY Mellon, suggesting that several prominent banks might soon offer cryptocurrency services. What actions did BNY take to become a topic of such speculation?
BNY Mellon and Cryptocurrency
BNY Mellon has received an exemption from the SEC‘s stringent rules on digital asset custody. As America’s largest custody bank, BNY is now pursuing institutional cryptocurrency custody, having obtained the SAB 121 exemption that many banks are eager to replicate. According to Chris Land, general counsel to U.S. Senator Cynthia Lummis, this move has removed obstacles for one of the largest banks to provide cryptocurrency custody services.
“BNY wants to enter the cryptocurrency custody business. They faced some challenges with the Staff Accounting Bulletin (SAB) 121 and seem to have received a form of exemption from the SEC to move forward.”
SEC Chief Accountant Paul Munter announced that some organizations qualify for the SAB 121 exemption, likely relating to the reserves of the entity providing custody services.
Cryptocurrencies and Major Banks
Globally, the number of banks delving into cryptocurrency is on the rise. Even giants like JPMorgan, while not directly entering the crypto space, play active roles in the ETF process. Referring to BNY’s recent action, Saylor posted that more banks might follow suit and venture into cryptocurrency custody services.
As banks begin to see substantial interest in custody services, they may also anticipate greater involvement in the trading services aspect. The booming cryptocurrency market could represent a significant income source for banks. With BNY, founded in 1784, formally announcing its cryptocurrency custody services, the implications for the industry are poised to unfold dramatically.
