BNY Mellon launches crypto custody services in Ireland amid central bank’s Bitcoin concerns

Ireland’s central bank has stated that with the rising popularity of cryptocurrencies like Bitcoin, digital assets are of “great concern.” At the same time, America’s oldest bank continues with its plans to launch crypto custody services in Ireland.

Cryptocurrencies are a ‘great concern’

One of the top officials at Ireland’s central bank, Derville Rowland, said, “Crypto assets are quite a speculative, unregulated investment.” She added that people should be “really aware that they could lose the whole of that investment."

The Irish central bank’s comments come after several central bank governors, including Andrew Bailey of the Bank of England and Haruhiko Kuroda of the Bank of Japan, have raised the alarm on crypto investments. 

Bailey said that digital assets have no intrinsic value and that people should only make purchases of these currencies if they are prepared to lose their money. Haruhiko cited concerns of the fluctuations in crypto prices, stating that Bitcoin’s volatility is “extraordinarily high.”

In March, the central bank warned that crypto companies would have to comply with anti-money laundering rules. This move would mean that digital asset traders in the country would no longer be able to buy and sell digital currencies anonymously.

Rowland is expected to take over as chairwoman of the European Securities & Markets Authority (ESMA)’s investment management standing committee in the summer. 

BNY Mellon to create a new hub in Dublin

Since the start of the year, BNY Mellon has increasingly adopted cryptocurrencies, even becoming one of the first US banking giants to offer custodial services in the country. 

Following the New York-headquartered institution’s decision in February to enter the crypto space, the bank plans to expand its business to Ireland and launch a digital asset unit based in Dublin.

The new initiative, called “Digital Innovation Hub,” will be regulated by the Irish central bank and will act as a custodian for cryptocurrencies including Bitcoin, non-fungible tokens (NFTs) and central bank digital currencies (CBDC) in the future.

Through this hub, clients would be able to hold, transfer and issue digital assets.