Bny Mellon Custodian Bank Explained

Bny Mellon Custodian Bank is a leading provider of custody and accounting services for institutional investors.

Their services include safekeeping of securities, accounting and reporting, and investor services.

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A custodian bank is essentially a bank that holds and safeguards assets on behalf of its clients.

Custodian banks provide a range of services, including safekeeping, accounting, and reporting, to ensure the integrity and security of the assets.

They can hold a variety of assets, such as securities, cash, and other financial instruments.

Custodian banks are often used by institutional investors, like pension funds and endowments, to manage their assets.

BNY Mellon, for example, is one of the largest custodian banks in the world, with over $35 trillion in assets under custody.

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Security is mission critical in custodian banking, and BNY Mellon has provided this service successfully for over 225 years. They've been evolving the custody banking sector since the late 1700s.

The SEC is not raising concerns over security as a legitimate excuse, but rather as a way to pivot to another concern if needed. BNY Mellon will have the sole responsibility to ensure the security of digital assets in their custody.

A single mistake could bring down BNY Mellon's reputation built over 225 years. In the age of digital transformation, cybersecurity preventability measures and the sophistication of cybersecurity attacks have both increased.

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Security is paramount in custodian banking, and BNY Mellon has been a pioneer in this field for over two centuries.

BNY Mellon has been evolving the custody banking sector since the late 1700s, making security a top priority.

The SEC's rejection of Bitcoin spot ETFs at an increasing rate actually speaks to an expected increase in investor demand for digital asset products.

This is a huge win for the digital asset market, as well as for BNY Mellon, which is now holding custody of digital assets on an in-house platform.

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BNY Mellon's move is likely to alter the SEC's position on digital assets and change investor perception of them.

In fact, the SEC's approval of digital asset products is a game-changer for investors and investment firms, making it highly preferred but not required.

Custodian banks like BNY Mellon hold stock and settle trades for funds that invest in publicly traded stocks, acting as crucial middlemen between asset managers and publicly traded companies.

Their role is similar to plumbing, allowing investors to safely buy stock in public companies.

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Even Alexander Hamilton, a founding father, knew that perfection is impossible, saying "I never expect a perfect work from an imperfect man".

BNY Mellon, the world's most prestigious and critical institutional investment services firm, is taking a huge risk by venturing into the digital asset space.

Their 225-year-old reputation could be ruined by one mistake in seconds.

Digital assets are naturally more susceptible to evolving technologies, making them a moving target for cybersecurity threats.

Cybersecurity attacks and preventability measures have increased in sophistication, making it a challenging task to ensure the security of digital assets.

BNY Mellon will have the sole responsibility to ensure the security of digital assets, a daunting task considering the company's history of custodian banking.

A momentary error in BNY Mellon's digital asset custody platform could potentially hurt their business, but it's unlikely to bring down the company. The platform is a work-in-progress that originated in 2019 and is being rolled out in a significant way.

BNY Mellon has a long history, built over 225 years, and has assembled a team of experienced and innovative experts to develop the platform. This suggests that they're taking a cautious and deliberate approach to its development.

Even if the world's most secure custodian has a security malfunction, it's unlikely to impact their current business model. The company's focus on budgetary concerns and perfection may have taken priority over the project's timeline.

BNY Mellon likely took 3 years to ensure they had the capacity to build a product worthy of publicly announcing as a work-in-progress.

BNY Mellon has been granted an exemption from the SEC's Staff Accounting Bulletin No. 121, also known as SAB 121, which means they can operate outside of the rule that advises entities holding customer crypto to report such holdings as corporate liabilities.

This exemption could pave the way for major U.S. banks to custody customers' Bitcoin and cryptocurrencies. Michael Saylor, founder of MicroStrategy, believes that one or more mainstream banks may soon receive the green light to custody crypto.

BNY Mellon's exemption from SAB 121 requirements may signal a softening of the U.S. federal crypto crackdown, which has been criticized by industry proponents for years.

BNY Mellon, the world's largest custody bank, has announced its support for crypto users by accepting Bitcoin and Ether for storage and transfer. This move is a significant step forward for institutional investors who were previously hesitant to get involved with cryptocurrency due to security risks.

The bank will store the private keys required to access and transfer those assets, providing a secure and reliable way for clients to manage their digital assets. This service will also include bookkeeping services on Bitcoin and Ether, just like traditional investment products.

BNY Mellon's goal is to build a digital asset platform that enables the interoperability of traditional assets and digital assets. This means that clients will be able to store and access both traditional and digital assets from one platform.

The bank's chief risk officer, Katey Neate, has stated that the idea behind this initiative is to create a digital asset platform that is safe and accessible for all users.

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BNY Mellon, the largest U.S. custodian bank, has been granted an exemption from the SEC's Staff Accounting Bulletin No. 121, also known as SAB 121.

This exemption may enable BNY Mellon to operate a Bitcoin custody service, which could pave the way for major U.S. banks to do the same.

The SAB 121 exemption could signal a softening of the U.S. federal crypto crackdown, which has been criticized by industry proponents for years.

BNY Mellon's exemption is significant because it allows the bank to operate outside of the SEC's requirements for reporting and disclosing cryptocurrency holdings.

Industry experts, such as Michael Saylor, founder of MicroStrategy, believe that one or more major banks in the US will soon be able to custody Bitcoin.

This could accelerate the spot price of Bitcoin, as Saylor has previously suggested that bank custody of BTC is one of the catalysts needed to propel the price above $5 million per coin.