BNY Mellon may have received SEC approval to hold Bitcoin and crypto assets

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BNY Mellon, America’s largest custodian bank, appears to have received SEC approval to offer institutional crypto custody services, according to the testimony at a public hearing in Wyoming.

Testimony by Chris Land, general counsel to U.S. Senator Cynthia Lummis, indicated that BNY Mellon received a “dispensation” from complying with the SEC’s Staff Accounting Bulletin (SAB) 121. These guidelines were previously seen as a major hurdle for banks looking to enter. the crypto custody business.

This variation could pave the way for BNY Mellon and other banks to begin offering crypto custody services to institutional clients.

“(BNY) is looking to get more involved in the crypto custody business,” Land said. “They had some issues with SAB 121, and the SEC apparently gave them some sort of variance from SAB 121 to go forward.”

SAB 121 requires entities holding crypto assets to list the assets on their balance sheet and create a corresponding liability equal to the value of the assets held. The crypto industry has long criticized the rule as overly burdensome.

However, BNY Mellon, which is regulated by the Federal Reserve and New York’s Department of Financial Services, may have found a way forward, with the SEC and Federal Reserve apparently giving a no-objection to BNY’s digital asset custody plans.

Chris Land also suggested that BNY Mellon could argue for an exemption from New York’s BitLicense, which regulates crypto businesses in the state. According to Land, the bank is likely to argue that federal banking laws provide preemption over state laws like the BitLicense.

BNY Mellon offering crypto custody services could be a pivotal moment for crypto-institutional adoption. Its entry signals the recognition of Bitcoin and other digital assets as legitimate financial instruments, further cementing Bitcoin’s status as “real money” in global finance.

Michael Saylor approved the news by sharing his thoughts about X. Saylor noted that there are credible rumors that one or more major US banks will soon be able to hold Bitcoin.

BNY Mellon’s involvement in cryptocurrency custody raises concerns in the Bitcoin community, as Bitcoin was originally designed as a decentralized currency to bypass traditional financial systems, particularly large banks.

The idea of ​​a major financial institution acting as a custodian for Bitcoin may seem contrary to the cryptocurrency’s core ethos, which sought to resist centralization and control. Some argue that BNY Mellon’s move undermines Bitcoin’s founding principles by integrating it into the very system it sought to challenge.

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