Bank of New York Mellon is optimistic about a meaningful revenue ticking from its crypto services. On Tuesday, January 18, the bank’s chief financial officer Emily Portney said that the bank is collaborating with Fireblocks, a unicorn FinTech that allows financial institutions to store crypto assets.
Portney said that the U.S. regulators should provide more clarity on the rules for the digital assets and said there’s a lot of confusion prevailing over what activities are allowed. In an interview with Reuters, Portney said:
“We’re hoping for more clarity around digital assets. Frankly, it’s a bit confusing about who actually regulates digital assets and especially crypto … and of course exactly what you can or cannot do”.
Portney’s comments show clear frustration regarding the government’s indecision pertaining to crypto assets. As the crypto ecosystem expands, traditional banking institutions have an interest in entering the crypto space. However, the banks are refraining from launching new products and expanding its existing offerings until the rules are clear.
BNY Mellon’s Sprint With Crypto
Banking giant BNY Mellon has been specializing in holding and servicing assets on behalf of clients. It has also been working on developing a custody and administration platform for digital assets.
Back in November 2021, the OCC said that banks need to get written permission before engaging in crypto-related activities. The OCC along with other regulators have engaged in a “policy sprint” to bring better crypto regulatory clarity for banks.
The effort is likely to bring new guidance and rules which shall be released as soon as this year in 2022. Portney added:
“A lot of the activity is happening in I guess what I would call the shadow banking system just because of the lack of clarity”.
We expect more regulatory clarity in crypto which can thus lead to higher institutional participation in the crypto space.