BNY Mellon is moving deeper into digital assets. The bank announced this week that it will offer institutional staking services through a partnership with Galaxy, the crypto financial services firm founded by Mike Novogratz. The move adds yield-generating capabilities to BNY Mellon's existing crypto custody offering, targeting large asset managers and hedge funds that want to earn rewards on proof-of-stake tokens without giving up control of their assets.
How the staking service works
Under the arrangement, Galaxy will handle the technical side of staking — validator operations, delegation, and reward distribution — while BNY Mellon retains custody of the underlying assets. That separation is key for institutional clients who are often wary of moving tokens off a qualified custodian. The service will initially support a handful of proof-of-stake networks, though the firms didn't specify which ones. Galaxy already stakes for its own products, so the infrastructure is in place.
BNY Mellon has been building out its crypto services since 2022, when it started offering custody for Bitcoin and Ether. Staking is a natural next step. It lets the bank capture more revenue from the same client relationships — custody fees plus a cut of staking rewards. It also keeps BNY Mellon competitive with other custody players like Coinbase Custody and Fidelity, which already offer staking to institutions. The timing isn't accidental: institutional interest in staking has grown as more traditional funds allocate to proof-of-stake tokens.
Galaxy's role
Galaxy has been positioning itself as a bridge between traditional finance and crypto. The firm already provides trading, asset management, and advisory services. This partnership gives Galaxy a distribution channel through one of the world's largest custodians. For Galaxy, it's a way to scale its staking operations without having to win each institutional client one by one. The deal also deepens Galaxy's relationship with BNY Mellon, which has been a client of Galaxy's trading desk for some time.
The staking service is expected to go live later this year, pending regulatory approvals. BNY Mellon will need to navigate state-by-state licensing for staking-as-a-service, which some regulators treat differently than plain custody. The bank hasn't said which networks will be supported first, but Ethereum staking is the obvious candidate given its institutional adoption. If the rollout goes smoothly, expect BNY Mellon to add more proof-of-stake chains and possibly expand into other yield-bearing crypto products.
