The largest custodian bank present in the world at the moment would have to be the Bank of New York Mellon. Well, the back has managed to strike a proper partnership with the famous blockchain software company Chainalysis in order to track all the cryptocurrency transactions of the users in the Bank.
According to crypto news for today, the Bank of New York Mellon has made the announcement that a possible partnership is to be established between the bank and the platform for blockchain data known as Chainalysis in order to properly track as well as analyze the different products of cryptocurrency.
The Bank of New York Mellon is known to be the largest name in the list of custodian banks and has a total of about $46.7 trillion in net assets. Hence, this is a pretty big partnership between two prominent players in their respective fields.
Chainalysis is known to be of the firms for proper blockchain data analysis and this company is known to provide amazing services to the different institutions of traditional finance. Not just that but it also allows the other larger firms to manage all their legal risks that come forth with making investments in the market of cryptocurrency for sure.
As a significant portion of the entire partnership which is to take place between these two organizations, the Bank of New York will use the software of Chainalysis to keep a track record of the data related to cryptocurrency assets in the best way.
Chainalysis is offering great risk management software to BNY and this also includes a KYT Adjustment which is also known as Know Your Transaction, Kryptos, and Reactor.
The KYT Flagging system is definitely the most important part of the entire software. This amazing software will help the bank in finding out information about the different cryptocurrency transfers that are taking place in the bank. It will also assist in figuring out which transactions are high-risk.
In case the KYT system in the software detects particular crypto that is being transferred to a particular wallet address that has been sanctioned, it will be able to properly block the transaction without any hindrance.
The Reactor system that is provided in the software will offer the firm other important powers related to the investigation on the entire blockchain and with the addition of Kryptos, the firms will be able to properly store and translate data in the best way.
Even complicated and complex forms of data can be translated very easily into cogent information using Kryptos which is a great achievement for the firms.
Talking on the partnership, Caroline Butler, head of global custody, tax, and network management at BNY Mellon, emphasized the importance of ensuring trust as the banks enter the world of digital assets:
“At BNY Mellon, we enter the digital asset market with the title of the most trusted asset service provider. Working with Chainalysis and other leading fintech companies, we are developing our capabilities in the growing cryptocurrency industry and reflecting this in our products.”
Despite the services that Chainalysis offer drawing criticism from more privacy-oriented crypto users, its ability to provide critical monitoring services to large firms helps legitimize the adoption of cryptocurrencies into traditional finance.
“Chainalysis has always believed that financial institutions are critical to the overall growth and success of the cryptocurrency industry,” Chainalysis co-founder Jonathan Levin mentioned in a statement.
BNY Mellon’s push into cryptocurrency began in February last year when it announced plans to hold, transfer and issue Bitcoin and other cryptocurrencies as an asset manager on behalf of its clients. This shadows a wider trend of traditional finance warming to the idea of cryptocurrency, with household names such as Morgan Stanley, Citibank, and JPMorgan now managing and actively investing in cryptocurrency.
