BNY Mellon Launches Staking for Institutional Clients With Galaxy

BNY, the world's largest custody bank, announced on August 4 plans to add staking to its digital asset platform. Galaxy will serve as the partner, providing the technical infrastructure for reward distribution to institutional clients without moving tokens outside the bank's custodial control. For a market where large investors have avoided staking for years due to operational hurdles and compliance requirements, this marks a notable shift.

BNY Adds Staking to Its Custody Service

BNY, formerly known as Bank of New York Mellon, launched crypto custody, including Bitcoin, back in 2022. The bank administers assets worth tens of trillions of dollars and remains one of the oldest financial institutions in the US, so any move it makes toward crypto gets close attention from competitors and regulators. Now BNY is expanding that business and adding staking directly on the platform where clients already hold their tokens.

The service will launch once the necessary regulatory approvals are in place. The company hasn't named an exact launch date, but the official announcement itself signals that internal sign-off on the product is done. Galaxy will act as both infrastructure provider and design partner, meaning the team will help build the product rather than just handle the technical side. For a bank that earns fees on asset custody, a yield-bearing product like staking gives clients another reason to stay rather than move to less regulated players.

What Changes for Institutional Investors

Large funds, insurers, and pension administrators that wanted to earn staking rewards on Ethereum and other Proof-of-Stake assets previously had to move tokens to a separate provider. That added operational risk and complicated reporting to regulators. For conservative institutions bound by strict rules on which counterparties they can use, that transfer was often a dealbreaker.

Now the asset stays under BNY's custody from start to finish. For compliance teams at large institutions, that removes one of the biggest barriers to staking. Pension funds and insurers that previously avoided Proof-of-Stake assets specifically because of third-party transfer risk now have a path to participate without changing their existing custody setup. Staking income becomes an added source of return alongside any gain in the asset's price.

Galaxy's Role in the Deal

For Galaxy, a partnership with a bank of this size means access to a client base it likely couldn't reach on its own. Founded by Michael Novogratz, Galaxy has long worked in trading, mining, and asset management, but the BNY deal puts it in a completely different weight class of clients. Even a small share of the bank's custodied assets moving into staking would generate a meaningful fee stream for the publicly traded company, which trades under the ticker GLXY.

Design-partner status also raises Galaxy's standing among crypto infrastructure providers serving traditional finance. The company already works with major players in custody and derivatives, and the BNY deal puts it alongside names like Coinbase Custody and Anchorage Digital. For Galaxy, this isn't a one-off contract but a way to establish itself as the infrastructure provider for banks that don't want to build staking in-house. Similar deals with other custodians could follow the same pattern in the coming months.

Custody Banks Are Racing Into Crypto

BNY isn't the only major bank expanding blockchain services this week. Wells Fargo joined JPMorgan and Citi in the race to tokenize Wall Street's settlement infrastructure. Italy's Intesa Sanpaolo tripled its stake in a staked Ether ETF while cutting its spot bitcoin ETF position by 94%. Competition for institutional crypto clients has clearly intensified over the past week, and staking has become one of the main battlegrounds.

BNY itself isn't stopping at staking. The bank is moving its transfer agency record-keeping onto blockchain, building a single onchain ownership ledger instead of relying on multiple intermediaries. Round-the-clock settlement for tokenized US Treasuries is planned for 2027, with testing on a private blockchain set to begin before the end of this year. Staking fits into a broader strategy rather than standing as a one-off experiment.

What Comes Next

Launching staking depends on regulatory approval, and BNY hasn't given a specific date. For a bank this size, sign-off usually takes months rather than weeks, especially for a new type of service aimed at clients with billions in assets. By the time it launches, companies already offering similar products will have had time to lock in part of the market.

• Regulatory approval hasn't been granted yet, leaving the launch timeline uncertain.
• Fidelity Digital Assets and Coinbase Custody already offer similar products to institutional clients.
• Staking returns depend on network parameters of Proof-of-Stake assets that the custodian doesn't control.
• Regulatory stance on staking could shift before the service actually launches.

If BNY gets approval in the coming months, staking will be another step in turning custody banks into full-fledged crypto infrastructure providers. For Galaxy, the deal confirms that large institutions want simple, controlled ways to earn on Proof-of-Stake assets. For the rest of the market, it's a signal that staking is no longer a niche service for enthusiasts but a product the world's most conservative financial institutions are willing to offer.