The 240-year-old custodian bank is letting institutional clients earn rewards on Ether and other proof-of-stake tokens, putting it in direct competition with Coinbase.
BNY Mellon, the 240-year-old custodian bank, is adding crypto staking to its digital asset custody platform. The service lets institutional clients earn rewards on Ether and other proof-of-stake tokens they already hold with the bank.
BNY launched its Digital Asset Custody platform in October 2022, initially supporting Bitcoin and Ether for a select group of institutional clients. The setup let pension funds and asset managers hold and transfer crypto within a regulated structure. The bank established its Digital Assets Unit in February 2021, during the last bull market's institutional push.
The staking addition puts BNY in more direct competition with crypto-native custodians like Coinbase, which has long offered staking and serves as the custodian for most US spot Bitcoin ETFs. The difference is the wrapper: BNY offers integration with traditional financial services, risk mitigation, and the kind of regulatory standing that compliance officers rely on, the bank said.
BNY already serves as the primary custodian for Ripple's RLUSD stablecoin reserves and has supported BlackRock's BUIDL tokenized fund, which brings short-term Treasury instruments on-chain. By May 2026, BNY plans to provide Bitcoin and Ethereum custody in the UAE through local partnerships.
Packaging staking into existing custody infrastructure removes friction for regulated entities. An asset manager can now hold Ether, earn staking rewards, and report everything through the same custodial relationship they use for their Treasury portfolio, BNY executives said.
The SEC under the previous administration took an aggressive stance against staking services. Kraken paid a $30 million settlement in 2023 over its staking program. The current regulatory environment appears more accommodating, and BNY's move suggests the bank's legal team sees enough clarity to proceed, according to a person familiar with the bank's thinking.
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