BNY Mellon Extends Crypto Push with Investment in Fireblocks

A little over a month since it unveiled plans to create a digital assets unit, BNY Mellon has invested in crypto custodial services provider Fireblocks, taking part in a $133 million funding round along with investment firm SVB Capital.

Fireblocks says the added investment will help with a “large-scale expansion of resources to help re-platform the financial system to digital assets”, adding, “Our goal with the new funding round is to remain an independent technology partner to top-tier financial institutions to support their transformation and service the market horizontally.”

The company says its direct custody model (which means providing custody for a firm’s own digital assets, utilising their own internal scale and balance sheet) allows financial institutions to create scalable, unique offerings that differentiate their brand from the competition. This is in contrast to “digital-native sub-custodians” within the digital asset space, who are carrying over a traditional financial model into an emerging asset class that it cannot support at scale, the firm further argues.

“Fintechs and banks require not only a specialised custody and settlement infrastructure to ensure customers funds are safely managed, but a platform that enables new lines of digital offerings,” says Michael Shaulov, CEO of Fireblocks. “While we have no plans to become a bank, we believe our infrastructure will lend itself perfectly to power an entirely new era of financial services.”

Roman Regelman, CEO of asset servicing and head of digital at BNY Mellon, adds, “Developing products to bridge digital and traditional assets is foundational to the future of custody.”