BNY Mellon focusing on digital assets sans crypto, deems tokenization ‘next wave of securitization’
A top executive said that cryptocurrency is just one aspect of digital assets.
BNY Mellon is enhancing its focus on digital assets and has plans of integrating them with all aspects of its business, but that focus does not extend to crypto, American Banker reported May 15.
The focus stems from the bank’s digitization strategy, as part of which it is now using artificial intelligence and machine learning in all business lines, according to Roman Regelman, CEO of Securities Services and Digital at BNY Mellon.
Exec says digital assets are broad
Regelman said BNY Mellon is focusing on distributed ledger technology, tokenization, and digital cash.
He explained that BNY Mellon’s digital asset strategy only partially involves crypto, stating:
“Crypto is an example of digital assets, but to say that digital assets are a lot more than crypto is an understatement.”
He went on to outline BNY Mellon’s three-part plan for digital assets. He said that first, BNY Mellon wants to provide all of its existing services — such as custody and clearing services — for digital assets.
He said that the second part of the company’s vision involves blockchain and other technologies that will “advance and modernize existing infrastructure.”
Regelman added the third part involves new use cases, such as tokenization, which could be the “next wave of securitization.” This would allow small investors to obtain tokenized baskets of assets for lower amounts.
BNY Mellon builds on earlier custodial services
Regelman said that these are long-term goals, and there is no definite timeline but noted that BNY Mellon would extend certain businesses to digital assets in the next year and a half.
When we talk about asset classes, we will talk the same way about equities, fixed income and digital assets in the same sentence. That’s how people are going to use blockchain. That’s how we’re going to tokenize things. It’s going to be a normal thing.
BNY Mellon has previously undergone various developments related to blockchain and digital assets. The firm announced it would launch crypto custodial services in 2022 and partnered with Chainalysis to monitor crypto transactions the same year.
The firm also announced a custodial partnership with Circle in April 2022.