Dublin to play key role as digital assets used more often, BNY Mellon says

Dublin has a critical role to play as cryptocurrencies such as bitcoin become more mainstream, according to BNY Mellon, which earlier this year became the first big global custodian bank to embrace digital assets with the setting up of a dedicated unit.

Speaking to The Irish Times on a visit to Dublin last week, Roman Regelman, chief executive of asset servicing and head of digital at America's oldest bank, spoke about its leap into the market for crypto.

Mr Regelman said a growing number of institutional investors are interested in cryptocurrency while regulatory clarity is also increasing as to how it should be managed.

BNY Mellon recently established a digital innovation hub in Dublin which, pending approval from the Central Bank, will act as a custodian for digital assets, which as well as cryptocurrencies, also include non-fungible tokens (NFTs).

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‘Amazing ecosystem’

The bank has deepened its focus on digital assets in recent months by investing in Fireblocks, a platform that allows financial institutions to store, move and issue cryptocurrencies. Last month is signed a major deal with Grayscale Investments to provide asset serving and exchange-traded funds (ETFs) services for its Grayscale Bitcoin Trust.

Mr Regelman said the Irish capital will play an essential role as BNY Mellon and its peers start to treat digital assets as they would other holdings.

“Dublin really has an amazing ecosystem here. I’m not talking just about banking but there are digital operations, technology, risk, compliance and legal all here. This has all led to a really vibrant environment for working with digital assets,” Mr Regelman said.

“Some of my key people are based here and there are going to be a lot of announcements emanating out of here . . . There really aren’t many places like Dublin outside of New York that have such an environment.”

Technical architecture

Mr Regelman's comments come just days after Central Bank governor Gabriel Maklouf praised the technical architecture behind cryptocurrencies, but also warned of the risks they pose as more individuals trade digital assets. They also come amid reports that PayPal has begun assembling a small team locally to help support its move into cryptocurrencies.

The Republic has become something of a hub for blockchain, the technology upon which cryptocurrencies are developed with companies such as We.trade, a banking consortium whose members includes HSBC, Santander, KBC and Deutsche Bank, based here. Other notable companies with operations in Dublin include Consensys, which was set up by Joe Lubin, a co-founder of the blockchain-based distributed software platform Ethereum.

Mr Regelman dismissed suggestions that digital assets would replace other currencies anytime soon. “Digital assets will become more mainstream but, as they do, they will no longer be seen as such a strange animal.”