BNY Mellon says cryptos could boost revenue in 2023

Bank is waiting for clarity from global regulators on rules governing cryptos

BNY Mellon Financial offices                                 
Bank of New York Mellon says crypto assets could provide a meaningful contribution to the bank’s revenue – Photo:Alamy
                                

The chief financial officer (CFO) of Bank of New York Mellon (BNY) has said she feels crypto assets could provide a meaningful contribution to the bank’s revenue by 2023 or 2024.

Emily Portney is the CFO of BNY Mellon, the third-oldest bank in the US. The bank has already collaborated with Fireblocks, a unicorn fintech that enables financial institutions to store, move and issue cryptos.

Portney told Bloomberg the partnership acts as the “foundational to everything we’re going to do”.

The bank is now waiting for clarity from global regulators over the rules governing digital assets.

ETFs which hold cryptos directly

A physically backed bitcoin (BTC) exchange-traded fund (ETF) has yet to be approved by the US Securities and Exchange Commission (SEC), but if this were to happen it would give investment fund providers access to millions of individual crypto investors.   

The SEC has rejected numerous proposals for a BTC ETF thus far, saying they did not meet the requirements to prevent fraudulent and manipulative activities. 

Portney said: “There are proposals in front of the Securities and Exchange Commission that haven’t yet been approved on whether ETFs can actually hold digital assets directly versus futures.”

Still, the CFO believes if the SEC does provide clarity on this issue during the first half of 2022, this would offer an important turning point for the industry.

ProShares’ bitcoin futures ETF

ProShares launched the first-ever BTC futures ETF on 19 October 2021.

The SEC approved the fund’s launch, with Gary Gensler, chair of the SEC, saying it offered significant investor protection.

The ETF is listed under the New York Stock Exchange (NYSE) ticker BITO. At the time of the launch, ProShares declared that “BITO’s launch will mark a milestone for ETFs”.

The ETF became the second most traded ETF on record, but then fell by 30% during its first two months to become one of the 10 worst launches ever.

Further reading

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