The 2024 BNY Mellon Wealth Management Study reveals a divided perspective among family offices regarding cryptocurrency investments. Approximately 39% of the surveyed family offices are either actively investing in cryptocurrencies or considering them, highlighting a keen interest in this modern asset class. These offices are motivated by the desire to stay abreast of new investment […]
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Singapore Announces Global Tokenization Initiative in Partnership With BNY Mellon, DBS, JPMorgan, and MUFG
The Monetary Authority of Singapore (MAS) has announced a global tokenization initiative that seeks to allow tokenized assets to be exchanged by different financial institutions across borders. The initiative, touted by MAS officials as the evolution of Project Guardian, a series of tokenization pilots carried by the institution, has the support of banking powerhouses like BNY Mellon, DBS, JPMorgan, and MUFG.
Monetary Authority of Singapore Announces Global Layer One Tokenization Project
The Monetary Authority of Singapore (MAS) announced Global Layer One (Gl1), an initiative to integrate global tokenization activities under one interconnected network. The project, which has the involvement and support of banking behemoths like BNY Mellon, DBS, JPMorgan, and MUFG, seeks to “facilitate seamless cross-border transactions and enable tokenized assets to be traded across global liquidity pools, while meeting relevant regulatory requirements and guidelines.”
The MAS announcement also establishes that the amalgamation of public and private companies in this project will ensure that the digital structures resulting from this initiative will comply with international standards and regulations.
GL1’s network is being presented as an evolution of Project Guardian, a series of initiatives exploring the future of tokenization in financial markets.
MAS Deputy Managing Director of Markets and Development Leong Sing Chiong stated that while Project Guardian has “successfully demonstrated that tokenized financial assets such as fixed income, foreign exchange and asset management products can be traded, distributed, and settled seamlessly across borders,” there is a need for a scalable infrastructure “to fully realize the potential of tokenized markets, and achieve network effects.”
Interconnected Tokenization Networks and More Pilots
In addition, the authority also announced the concept of an Interlinked Network Model (INM), a protocol to allow financial institutions and banks to exchange and transfer tokenized assets even if they are not present in the same network. A whitepaper detailing architecture considerations and implementation advice is already available publicly.
As part of Project Guardian, the authority announced five more pilots involving different use cases with several industry giants.
Citi, T. Rowe Price Associates, Inc., and Fidelity International are testing a bilateral digital assets trade mechanism. BNY Mellon and OCBC are piloting a solution for cross-border FX payment across different networks. Ant Group is experimenting with a global liquidity management solution to allow worldwide multicurrency clearing and settlements.
Also, Franklin Templeton is exploring tokenizing money market funds using digital assets for shares. JPMorgan and Apollo are working on an asset management suite using digital assets to reduce manual processes.
What do you think about MAS’ tokenization initiatives? Tell us in the comments section below.
BNY Mellon: US Dollar’s Global Reserve Status Safe Despite BRICS Expansion
The Bank of New York Mellon has provided insights into why the growth of the BRICS economic alliance is unlikely to impact the U.S. dollar’s dominance as the global reserve currency. “We think the most important factor for dollar use into the next decade revolves around technology instead,” said the investment bank’s analyst.
BNY Mellon on US Dollar’s Dominance
The Bank of New York Mellon Corp. (BNY Mellon) explained in a note, published Friday, that the U.S. dollar is unlikely to lose its global reserve currency status despite the expansion of the BRICS economic bloc. The leaders of the BRICS nations (Brazil, Russia, India, China, and South Africa) recently invited six nations — Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE) — to join the alliance as new members.
Bob Savage, head of market strategy at BNY Mellon, does not believe the expansion of the BRICS group is enough to dethrone the U.S. dollar. Noting that one of the BRICS objectives is to find an alternative to the USD, he wrote:
The USD is unlikely to lose its global reserve status anytime soon … new currency unions should look to technology or green baskets, rather than gold- or carbon-based ones.
During their recent summit, the BRICS leaders agreed to encourage the use of local currencies in international trade and financial transactions, thereby reducing reliance on the U.S. dollar.
According to BNY Mellon, the additions of Iran, the UAE, Egypt, and Saudi Arabia will make the new BRICS group a heavyweight in energy exports, particularly oil. This suggests that the economic bloc could introduce a commodity basket backed by gold and oil, the BNY Mellon analyst noted.
“The inclusion of the UAE and Saudi Arabia lift the per capita GDP and economic power, but likely conflicts with longer-term issues about the energy transition from carbon to sustainable sources,” Savage continued. Moreover, he emphasized:
We think the most important factor for dollar use into the next decade revolves around technology instead – specifically high-end computer chips.
Do you agree with BNY Mellon about the U.S. dollar’s dominance? Let us know in the comments section below.
Bank of New York Mellon: ‘Clients Are Absolutely Interested in Digital Assets’
Bank of New York Mellon (BNY Mellon) has revealed that its clients “are absolutely interested in digital assets.” Emphasizing the need for clear crypto regulation, the bank’s head of digital assets noted: “We need responsible actors who can offer reliable services that live up to investors’ trust.”
BNY Mellon’s Clients Are ‘Absolutely’ Interested in Digital Assets
Bank of New York Mellon’s head of digital assets, Michael Demissie, said Wednesday at Afore Consulting’s 7th Annual Fintech and Regulation Conference that digital assets are “here to stay,” Reuters reported. The executive was quoted as saying:
What we see is clients are absolutely interested in digital assets, broadly.
Demissie cited a BNY Mellon client survey conducted in October last year which showed that more than 90% of clients expected to invest in tokenized assets in the near future.
The bank’s head of digital assets added that deeper crypto regulation is required, the publication conveyed. “It’s important that we navigate this space in a responsible way,” he stressed, elaborating:
We absolutely need clear regulation and rules for the road. We need responsible actors who can offer reliable services that live up to investors’ trust.
BNY Mellon was among the first banks to enter the crypto space. The bank announced in February 2021 that it has formed a new digital assets unit to build the industry’s “first multi-asset digital platform.” Roman Regelman, CEO of Asset Servicing and Head of Digital at BNY Mellon, detailed at the time: “BNY Mellon is proud to be the first global bank to announce plans to provide an integrated service for digital assets … 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.” In September 2021, the bank wrote: “Digital assets have clearly entered the mainstream.”
Last week, the bank appointed Caroline Butler as the CEO of its digital assets division. Regelman commented:
As institutional adoption of digital assets continues to evolve, we are committed to being a trusted provider of services to the broader financial ecosystem.
What do you think about the statement by Bank of New York Mellon’s head of digital assets? Let us know in the comments section below.
A Crypto Holiday Special: Past, Present, And Future With Ex BNY Mellon David Shwed
2022 is coming to an end, and our staff at NewsBTC decided to launch this Crypto Holiday Special to provide some perspective on the crypto industry. We will talk with multiple guests to understand this year’s highs and lows for crypto.
In the spirit of Charles Dicken’s classic, “A Christmas Carol,” we’ll look into crypto from different angles, look at its possible trajectory for 2023 and find common ground amongst these different views of an industry that might support the future of finances.
Yesterday, we spoke with investment firm Blofin on their perspective on the past, present, and future of crypto. Today, we continue the series with David Shwed, former Global Head of Digital Assets Technology at BNY Mellon, the world’s largest custodian and securities services provider, and current COO at Halborn.
Shwed: “What changed was the reality that too good to be true yields are exactly that, too good to be true. The money needs to come from somewhere, and it turns out that it was coming from risk loans and other business practices that relied on the steady increase of the price of crypto (…).”
This major financial institution, along with some of the biggest banks in the U.S., Goldman Sachs, Morgan Stanley, J.P. Morgan, finally embraced cryptocurrencies in 2021 and 2022. Still, recent events in the industry might impact crypto and digital asset adoption for legacy financial institutions.
Shwed: “I haven’t seen any slowdown from TradFi when it comes to entering/expanding into the crypto markets.”
Traditional Finances (TradFi) and Crypto Finances, in their many forms (CeFi, DeFi, etc.), have been converging. Will the collapse of Three Arrows Capital (3AC) and FTX push these institutions away from crypto? What is the likeliest regulatory outlook for 2023? We asked this former BNY Mellon executive this and much more. This is what he told us:
Q: What’s the most significant difference for the crypto market today compared to Christmas 2021? Beyond the price of Bitcoin, Ethereum, and others, what changed from that moment of euphoria to today’s perpetual fear? Has there been a decline in adoption and liquidity? Are fundamentals still valid?
A: What changed was the reality that too good to be true yields are exactly that, too good to be true. The money needs to come from somewhere, and it turns out that it was coming from risk loans and other business practices that relied on the steady increase of the price of crypto. As the price fell and the loans were due, many faced liquidation of their collateral and margin calls. That being said, we are seeing adoption in many other areas besides finance. Many major retailers are also entering the ecosystem, such as Nike, Matterl, Samsung, and LVMH.
Q: What are the dominant narratives driving this change in market conditions? And what should be the narrative today? What are most people overlooking? We saw a major crypto exchange blowing up, a hedge fund thought to be untouchable, and an ecosystem that promised a financial utopia. Is Crypto still the future of finance, or should the community pursue a new vision?
A: The narrative today needs to be risk management and security. Had 3AC/Voyager/Celsius and others had more institutional risk management practices, their demise may have been avoided. The same thought goes into security. There is a fundamental difference between crypto native security vs what we see in more mature financial institutions. We need to improve both drastically in order to restore trust.
Q: If you must choose one, what do you think was a significant moment for crypto in 2022? And will the industry feel its consequences across 2023? Where do you see the industry next Christmas? Will it survive this winter? Mainstream is once again declaring the death of the industry. Will they finally get it right?
A: The most significant moment was the FTX crash. The progression of SBF from the hero who will save us all to a criminal in a matter of weeks is evidence of the lack of transparency in the ecosystem. We will certainly feel the impact as we head into 2023 . I don’t believe we’ve seen the full impact as it relates to other organizations who have some exposure to FTX or are generally over-leveraged. I believe by the end of 2023 we will be back to where we were in the beginning of 2022 in part due to the institutional/enterprise markets. I’ve heard “Crypto is dead” many times throughout the years and they’ve been wrong every time. While the current situation is much different since the price decline is a result of many systemic failures, the same can be said for many crashes observed in TradFi Wall Street, the most similar being the 2008-2009 crisis and TradFi is still alive and kicking.
Q: Traditional finances (Tradfi) and crypto are merging in many ways. Will the collapse of FTX affect this trend? And in this context, do you see regulations leaning toward adopting an approach that will halt the integration between legacy and crypto financial companies?
A: While the collapse of FTX and the resulting collateral damage has shown to have negatively impacted the crypto market, I haven’t seen any slowdown from TradFi when it comes to entering/expanding into the crypto markets. In fact, many of the G-SIBs (Globally Systemically Important Banks) that I have spoken to have not changed or altered their roadmaps as it relates to crypto. I haven’t seen any indication of regulations halting the integrations between traditional and crypto. That being said, I believe we will see sweeping regulation in the crypto markets similar in size and scope of the Dodd-Frank Act.
As of this writing, Bitcoin trades at ,800 with sideways movement across the board. Image from Unsplash, chart from Tradingview.
BNY Mellon values Bitcoin on par with gold, what’s their price target?
In February, one of the oldest financial institutions in the United States, Bank of New York Mellon, announced the launch of a custody service for Bitcoin and other cryptocurrencies. Claiming that BTC has become a widely accepted asset, the institution opted to get ahead in innovation.
Now, BNY Mellon has published a valuation on Bitcoin comparing the characteristics of gold to the cryptocurrency in an attempt to give tools to determine its value. The BNY Mellon analysts recognize the unique properties of BTC and how difficult it can be to calculate its value when using metrics applied to national currencies. The analysts claimed:
it should be considered as part of the valuation mosaic. At the beginning of May 2020, a single Bitcoin was worth roughly ,8001 and the total market value of all Bitcoin was worth 0 billion2, accounting for 0.4% of total global currencies. At current rates, if Bitcoin replaced 5% of the world’s currency it would yield over 0,000/Bitcoin.
When comparing Bitcoin’s and gold valuation, BNY Mellon analysts referred to the Stock-to-Flow (S2F and S2FX) model created by Plan B. While acknowledging this model has flaws, they also referred to it as “elegant” with a “much more established gold market framework”. The analysts added:
The implication from this model is that as Bitcoin gains more mainstream momentum and is viewed more like gold, the scarcity value (as measured by S2F) and subsequent halving will ultimately drive prices to the gold dot cluster and implied total market value
However, the report claims valuation is “more art than science” and therefore emphasizes that all models have to reach Bitcoin’s “fair” price will be a “constantly” evolving work.
Bitcoin’s price in the short and long term
Bitcoin is trading at ,420, at the time of writing, retaking this important support zone. In the 24-hour chart, BTC is moving sideways but still is on a bullish trend in the 30-day chart with 17.8% gains. In recent weeks, Bitcoin’s price action was determined by large investors.
![Bitcoin BTC](https://www.newsbtc.com/wp-content/uploads/2021/03/Bitcoin-BTC28-860x424.png)
As indicated by analyst Lex Moskovski, the number of Bitcoin whales holding around 1,000 BTC has dropped to the trend line after peaking on February 21 when a massive sell-off began. Moskovski stated:
However, the price has risen since the start of the dump. This is bullish and also benefits decentralization. Text-book consolidation.
Co-founders of research firm Glassnode, Yan Allemann, and Jan Happel, noted that the cryptocurrency’s near-term performance will be correlated with the level of retail investor spending. BTC’s price could rise if a portion of the recipients of the stimulus package approved by Biden decides to invest in the cryptocurrency.
Many households now have an extra buffer of income to spend, due to new stimulus checks and decreased spending during lockdowns.
Will they invest this into markets or pay off debt?#Bitcoin‘s April performance will depend on it. https://t.co/UJdLxnfqva pic.twitter.com/xXbEICPjqM
— Jan & Yann (@Negentropic_) March 28, 2021
In the long term, Bitcoin’s supply shock will play an important role as crypto exchanges continue to register high levels of BTC outflow. This supply is turning illiquid, as analyst William Clemente noted. Predicting a rise in BTC’s price for Q3-Q4 this year, Clemente said:
the increase of negative-yielding bonds will leave fixed-income investors desperately searching for yield. With everything being manipulated in the fiat world, all roads lead to the free and open Bitcoin market.
A $50K Bitcoin Possible as MasterCard, BNY Mellon Announces Crypto Integration
Bitcoin edged higher on Thursday after traders realized MasterCard’s plans to integrate cryptocurrencies into its traditional payment services later this year.
The credit card giant’s revelation came days after Tesla, a Fortune 500 carmaker, showed a .5 billion worth of Bitcoin in its balance sheets this Monday, further asserting that it would start accepting payments in the benchmark cryptocurrency for its products and services. Bitcoin prices jumped about 20 percent on the news.
Traders reacted similarly to MasterCard’s announcement, pumping the Bitcoin price up by more than 3 percent on Thursday even as the cryptocurrency was correcting lower.
![Bitcoin, cryptocurrency, BTCUSD, BTCUSDT](https://www.newsbtc.com/wp-content/uploads/2021/02/wZ6Oldbz-860x498.png)
Bitcoin resumes its price rally on MasterCard adoption news. Source: BTCUSD on TradingView.com
The BTC/USD exchange rate hit an intraday high of ,658 ahead of the New York opening bell, showing its inclination to retest its previous record peak above ,000, followed by a bull run towards ,000, which many analysts consider as Bitcoin’s psychological upside target.
BNY Mellon Turns Bitcoin-Friendly
More evidence for an extended upside move comes from Bank of New York Mellon Corp, the US’s oldest bank, which announced its leap into the cryptocurrency sector on Thursday.
The custody service said that it would hold, transfer, and issue Bitcoin and other digital assets on behalf of its asset management clients, paving the way for more mainstream institutions to safely and legally access crypto investment services.
“Digital assets are becoming part of the mainstream,” said Roman Regelman, chief executive of BNY Mellon’s asset-servicing and digital businesses
Mr. Regelman noted that many hedge funds, asset managers, and other institutional investors started reaching out to BNY Mellon to offer bitcoin services in line with traditional assets, including Treasurys, technology stocks, etc. That prompted the bank to integrate crypto assets.
you should listen to @BNYMellon, @Visa, @Mastercard, @Fidelity, @PayPal, @massmutual, @square, @blackrock, @AB_insights, @GoldmanSachs, @ARKInvest, @RayDalio, etc when considering potential value of #bitcoin & digital assets rather than economists, doomers and cable news pundits
— Mike Dudas (@mdudas) February 11, 2021
What’s Ahead?
The Bitcoin industry now wobbles between warnings and euphoria.
In a note penned for the Financial Times, economist Nouriel Roubini reiterated his anti-crypto stance, calling out corporates to not copy Tesla’s bitcoin investment. Meanwhile, strategists at JPMorgan & Chase noted that companies should not hold Bitcoin in their reserves, citing its underlying price volatility against stable cash.
Jerry Klein, a managing director at Treasury Partners, added that corporates “invest their cash in very high quality, short-term fixed income securities, and are willing to accept a relatively low rate of return.” They won’t buy Bitcoin because it is too volatile for their balance sheets.
And then, there was Twitter. The social media giant’s chief financial officer Ned Segal noted that they might add BTC to their reserves if their employees and vendors ask to be paid in the cryptocurrency. That also kept Bitcoin’s overall bullish momentum alive.
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Bitcoin Futures Market Bakkt is Working Closely With BNY Mellon
Bakkt, a bitcoin futures market operated by ICE, the parent company of the New York Stock Exchange, is working closely with a major U.S. bank BNY Mellon according to Bakkt COO Adam White.
Read about @Bakkt's custody solution and why we've filed to become a NY trust, plus our acquisition of DACC and how we're working closely with @BNYMellon https://t.co/ecqMXWCoXe
— Adam White (@WhiteAdamL) April 29, 2019
To securely store the private keys of users that provide access to funds stored in crypto assets like bitcoin, White said that the firm is collaborating with BNY Mellon to geographically distribute private keys secured by the bank.
White said:
All cryptographic systems are secured in bank-grade vaults and datacenters that are protected with 24/7 physical security. Role-based permissions strictly limit employee access, and systems are routinely tested to ensure a seamless transition to our parallel disaster recovery facilities. Additionally, Bakkt is working closely with BNY Mellon to offer geographically-distributed storage of private keys secured by the bank. BNY Mellon has a longstanding history of safeguarding the assets of institutional clients such as hedge funds, asset managers, and broker dealers, and we’re excited to work with them.
Since its inception, Bakkt has been working on building a regulated and reliable infrastructure for crypto asset investors, enabling investors to invest in the crypto market in a protected environment.
According to White, the funds stored by Bakkt in bitcoin are insured by global insurance carriers, which would appeal to institutions and high net worth individuals that do not wish to be set off by potential risks involving cryptocurrency storage.
“The majority of assets are stored offline in air-gapped cold wallets that are insured with a 0,000,000 policy underwritten by leading global insurance carriers,” he said.
Although the launch of the bitcoin futures market by Bakkt is said to be on hold for the approval of the Commodities and Futures Trading Commission (CFTC), the company has made progress in establishing a solid infrastructure for institutiona clients.
“DACC shares our security-first mindset and brings extensive experience offering secure, scalable custody solutions to institutional clients. The team’s experience integrating multiple blockchains and operating cutting-edge consensus mechanisms is a valuable addition to our team and future product line,” White added.
The post Bitcoin Futures Market Bakkt is Working Closely With BNY Mellon appeared first on NewsBTC.