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Wall Street player BNY Mellon jumps on bitcoin bandwagon

·2-min read
Bitcoin prices rose further after BNY Mellon became the first global bank to say it would provide broad services for digital currencies

Bitcoin and other crypto currencies took another leap towards the financial mainstream Thursday when Wall Street player BNY Mellon announced plans to accept digital currencies.

BNY Mellon, which is known as the oldest US bank, said it will form a new digital assets unit to transfer, safeguard and issue digital assets in response to client demand.

The move comes as bitcoin values continue to climb to new heights after receiving a legitimacy boost when Tesla and Mastercard announced they would accept the digital currency, even as many regulators remain skeptical of the volatile currency.

BNY Mellon, which was founded by the first US Treasury secretary Alexander Hamilton in 1784, described the move as a response to market demand.

"BNY Mellon is proud to be the first global bank to announce plans to provide an integrated service for digital assets," said Roman Regelman, chief executive of asset servicing.

"Growing client demand for digital assets, maturity of advanced solutions, and improving regulatory clarity present a tremendous opportunity for us to extend our current service offerings to this emerging field."

Prices of bitcoin climbed further Thursday, rising to $48,364 at 1320 GMT, a new all-time high.

Electric automaker Tesla, which is led by bitcoin enthusiast Elon Musk, on Monday announced a $1.5 billion investment in the digital money and plans to accept the cryptocurrency from customers purchasing vehicles.

Mastercard followed suit on Wednesday announcing plans to start accepting "select cryptocurrencies" directly on its network for the first time.

Mastercard already has ventures with cryptocurrency outfits for consumers, but those funds are converted back to traditional currencies before entering the credit card network.

"Our change to supporting digital assets directly will allow many more merchants to accept crypto," Raj Dhamodharan, Mastercard's executive vice president for digital assets, said in a statement.

Despite the surge in bitcoin, skeptics note the currency remains highly volatile.

During her Senate confirmation hearing, newly-installed Treasury Secretary Janet Yellen said cryptocurrencies are vulnerable to illicit finance.

Uber Technologies Chief Executive Dara Khosrowshahi told CNBC the ride-hailing company has no plans to follow Tesla and purchase bitcoin with corporate cash.

"We're going to keep our cash safe," Khosrowshahi said. "We're not in the speculation business."

But Uber will assess customer interest in using bitcoin.

"If there's a need there, we'll do it," Khosrowshahi said.

General Motors Chief Executive Mary Barra said Wednesday the carmaker has no plans to invest in bitcoin.

"This is something we'll monitor and we'll evaluate," Barra said on a conference call with analysts. "If there's strong customer demand for it in the future, there's nothing that precludes us from doing that."

jmb/hs