New York grants BNY Mellon, the US' oldest bank, permission to receive some customers' BTC and ETH; BNY will store keys, offer bookkeeping services, and more
Founded by Alexander Hamilton, BNY Mellon is the first large U.S. bank to safeguard digital assets alongside traditional investments
Context & Ripple Effects
This approval caps a slow institutional march: Susquehanna built one of Wall Street's first Bitcoin trading desks back in 2018 (an early institutional beachhead), JPMorgan Chase broke the client-services taboo by banking Coinbase and Gemini in 2020 (its first crypto clients), and NYDIG showed the demand existed inside traditional banks via its FIS partnership in 2021 (letting bank customers buy and hold bitcoin). What changed now is who holds the assets: a Hamilton-founded custodial bank, not a fintech intermediary.
It matters because BNY Mellon is the archetype of the trust business — and because the path it just cleared stays narrow. Later coverage shows large custodial banks still blocked by the SEC's SAB 121 accounting rule (the custody bottleneck), making New York's permission the exception that proves how much of this market remains regulator-gated.
First-order effects
- BNY Mellon becomes the first large U.S. bank to safeguard digital assets alongside traditional investments, with key storage and bookkeeping for customers' BTC and ETH run through its existing custody operation.
- Wealthy clients of the bank no longer need a separate crypto-native custodian to hold bitcoin and ether next to their conventional portfolios.
Second-order effects
- Rival custodial banks named in later coverage as interested but hindered by SAB 121 now face pressure to win equivalent state-level approvals or cede the institutional crypto-custody niche to BNY Mellon.
- Crypto-native custody providers like NYDIG, whose bank-channel partnership modeled this demand, get a regulated-bank competitor at the top of the market.
Third-order effects
- If the pattern holds, digital-asset custody consolidates toward chartered banks — with accounting rules like SAB 121, not technology, determining which institutions can compete, as the later coverage of blocked custodians suggests.
- BNY's subsequent moves — the Goldman tokenized money-market fund partnership and blockchain-based transfer-agency record-keeping across trillions in serviced assets — indicate the custody franchise extends from holding coins to running the record-keeping layer for tokenized finance itself.
The trend: America's largest custodian banks are converting crypto from a trading-desk experiment into a regulated custody and record-keeping business, with state and federal regulators setting the pace of entry.