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Traditional financial institutions such as State Street and BNY Mellon are continuing to invest in the rapidly changing cryptocurrency market.
By lending its custody support to a new cryptocurrency exchange backed by the American bank State Street, Bank of New York Mellon is embracing a new cryptocurrency effort.
According to a Wednesday report by the Financial Times, BNY Mellon has joined a consortium of six banks behind the launch of London-based Pure Digital, a new crypto trading platform venture that is scheduled to execute its first Bitcoin (BTC) trade in the near future.
State Street announced plans to offer its trading infrastructure to Pure Digital exchange through its foreign exchange technology business Currenex in April, bringing the planned crypto venture into the spotlight. The institutional-grade platform for cryptocurrencies is planned to be a fully automated over-the-counter market with physical delivery and bank custody.
According to the article, BNY Mellon and State Street, as well as other unnamed banks supporting Pure Digital, are planning to launch a cash cryptocurrency trading platform to compete with larger industry participants. “We have spoken to all the top-tier banks but we think custody banks were some of the first to see demand, so they are now more advanced,” Pure Digital CEO Lauren Kiley said.
Pure Digital co-founder Campbell Adams reportedly stated that the company plans to launch trading “within a week,” with the first trade likely to be a Bitcoin transaction. Pure Digital is also unconcerned about partnering with banks, according to the executive, who believes the bank’s input is critical to the industry’s adoption. He stated, “The crypto market requires banks; I don’t think it can scale without them.”
The current news signals another step forwards in the adoption of bitcoin by financial institutions in the United States, with BNY Mellon and State Street becoming more active in the space. BNY Mellon continued to move into crypto after announcing crypto custody ambitions in February, becoming an exchange-traded fund service provider for leading crypto asset manager Grayscale Investments last week.
State Street is well-known for its digital currency partnership with Gemini, the Bitcoin exchange founded by the Winklevoss brothers. The bank formed a specialised digital finance section last month that would focus on bitcoin, blockchain technology, and central bank digital currencies.