The cross-functional, cross-business team, which will be led by Mike Demissie, head of advanced solutions at BNY Mellon, is currently developing a client-facing prototype that is designed to be the industry's first multi-asset digital custody and administration platform for traditional and digital assets.

The Office of the Comptroller of the Currency (OCC) in June last year gave the green light for banks to begin offering cryptocurrency custody services, enabling financial institutions to extend their traditional role as intermediaries in the safekeeping of stock certificates and the like to the emerging realm of digital assets.

Roman Regelman, CEO of asset servicing and head of digital at BNY Mellon. "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. Pending further evaluations and approvals, we expect to begin offering these innovative and industry-shaping capabilities later this year."

He says the new unit will deliver a secure infrastructure for transferring, safekeeping and issuing digital assets, leaning on its own technological prowess and the services of specialist third party fintechs.

BNY Mellon is not the first to enter the crypto-custody space - that honour goes to Northern Trust and Standard Chartered who entered the market in December. It has however beaten its nearest rivals JPMorgan and Citi to the punch.

"Enabling the use of digital assets is critical to transforming the future of custody," says Caroline Butler, head of custody at BNY Mellon. "Building the bridge between the traditional and digital spaces will create a front-to-back ecosystem for innovation. Our digital asset capabilities should help evolve the way the financial industry operates, including custody, collateral management, issuance, investment management and other segments where BNY Mellon is a key service provider."

BNY Mellon's arrival in the crypto markets - aligned with earlier news from Mastercard that it would beging processing cryptocurrencies across its network - sent the value of bicoin surging to an all-time high of $48,297 in early morning US trading.