American custodian bank and securities service company, Bank of New York (BNY) Mellon recently doubled down on its backing for digital currencies, stating that the nascent asset class ‘have come to stay’. The banking giant established its dedicated crypto unit back in February 2021 joining its counterparts in embracing the asset class.
According to Michael Demissie, BNY Mellon’s head of the digital assets unit and advanced solutions, clients and investors are expressing their interest in digital assets. While referencing a 2022 survey from his firm, Micheal, during a conference asserted that institutional investors’ had unwavering confidence in the digital asset class.
Notably, an October 2022 survey revealed that over 90% of custodian bank clients have shown interest in digital assets and tokenized products. Even though the year saw the fall of several big-name players in the industry, these investors are actively exploring investment options in the digital asset class.
Financial Institutions Diving into Crypto
The rising interest from investors has informed the entrants of several big banks into the digital asset industry.
Despite the recent market volatility, the American investment firm is determined to build a future where blockchain and related capabilities will transform the financial service system. As such, a high percentage of investors have begun investing in tokenized products while being optimistic about the long-term transformational potential of the technology.
In October last year, the US oldest bank partnered with Fireblocks and Chainalysis to offer institutional clients the opportunity to hold and transfer Bitcoin (BTC) and Ethereum (ETH) on its new crypto custody service.
Also, investment manager Goldman Sachs shared its intentions to inject funds worth tens of millions of dollars into crypto firms that suffered exposure after the collapse of FTX and its subsidiaries.
Interestingly, most institutions have become very comfortable with the digital representation of cash via blockchain-based technology, although the only fear still remains the cyber security risks as well as untrusted players in the crypto industry.
To this end, Micheal stressed the importance of a clear regulatory path for the nascent industry. In his words “We absolutely need clear regulation and rules for the road. We also need responsible actors who can offer reliable services that live up to investors’ trust”.
