Institutions ‘Absolutely Interested’ in Digital Assets: BNY Mellon Exec
The head of the digital assets unit at BNY Mellon — the world’s largest custodian bank — has reaffirmed his bullishness on blockchain.
Speaking at a recent fintech and regulation conference, BNY Mellon’s Michael Demissie pointed to a study by the bank last year, which found 91% of its institutional clients were interested including tokenized products in their portfolios.
Those clients represented more than $1 trillion in assets under management.
The benefits of tokenization, as noted by survey respondents, include the removal of friction from the transfer of value (cited by 84%) and increased access for mass affluent and retail investors (cited by 86%).
Despite the interest, 60% of respondents agreed the large technological lift required was a hindrance.
Demissie underscored the need for further industry regulation, reported Reuters, a bid to inspire responsible actors to provide reliable services that would bolster investor confidence.
“While crypto natives are looking forward to the day when all of capital markets infrastructure exists on an interoperable blockchain, the traditional Institutional Investor community has to date been less sure,” BNY Mellon wrote in its report.
“This study shows that minds are changing, with traditional investors ready to imagine a world where up to one-third of their portfolios will contain digital assets.”
BNY Mellon managed $44.3 trillion under custody and/or administration as of Dec. 31, with roughly $1.8 trillion assets under management across 35 countries. BNY Mellon stock is worth around just under $42 billion, up nearly 12% year to date.
BNY Mellon began exploring crypto with the formation of a digital assets technology solutions unit in 2021, tapping blockchain analytics firm Chainalysis and crypto custody startup Fireblocks in the process.
In October of last year, BNY began offering clients the ability to custody bitcoin (BTC) and ether (ETH) via a platform spun out of the solutions unit.
Last week, the bank named Caroline Butler as its CEO of digital assets in a newly created role designed to lead their enterprise-wide initiatives. Butler previously served as BNY Mellon’s CEO of custody services.