BNY Mellon, the world's largest custody bank, is partnering with Galaxy Digital to offer crypto staking services to its institutional clients. The deal, announced today, lets clients lock up certain cryptocurrencies to support blockchain networks and earn rewards — all without moving their assets off BNY's custody platform.
How the partnership works
BNY will integrate Galaxy Digital's staking infrastructure directly into its existing digital asset custody platform. That means clients don't have to transfer coins to a third party to stake them. Galaxy handles the technical side — running validator nodes, managing rewards, and handling slashing risk — while BNY keeps custody. The bank says the setup keeps client assets segregated and under its own control.
Why staking matters for institutions
Institutional investors have been sitting on large crypto holdings, but until recently the only way to generate yield was to lend them out or move them to a separate staking provider — both of which introduce counterparty risk. Staking through a custodian like BNY removes that friction. It's a way to earn passive returns — typically 4-12% annually depending on the network — while keeping the assets in a regulated, familiar environment. The timing isn't accidental. More pension funds, endowments, and asset managers are allocating to crypto, and they're asking for yield products that don't compromise security.
What this means for the market
BNY Mellon is the first major custody bank to offer staking directly. That puts pressure on other custodians — think State Street, JPMorgan, or Northern Trust — to follow suit or risk losing business. It also signals that staking has moved from a niche crypto-native activity to a legitimate service for traditional finance. Galaxy Digital, which already runs staking for several crypto funds, gets a distribution channel into BNY's massive client base. The deal could accelerate the trend of banks treating digital assets not just as something to hold, but as something to put to work.
The service is expected to launch later this year, pending regulatory approvals. BNY hasn't said which cryptocurrencies will be supported first, but staking typically involves proof-of-stake networks like Ethereum, Solana, or Cardano. The bank is likely to start with the most liquid options.
