BNY Mellon announced it will integrate crypto staking services into its institutional digital asset custody platform, allowing clients to earn staking rewards on assets held in custody. BNY is one of the few bank custodians with OCC nonobject letter coverage for crypto custody, making this a significant step toward full-service institutional crypto prime services from a regulated bank. The move positions BNY as a direct competitor to Fireblocks and other third-party custodians in the institutional segment.
For Armada's crypto desk, this is relevant on two levels. First, it raises competitive pressure on the Fireblocks custody partnership and warrants a review of whether Armada's MSA and custody SLA remain competitively structured. Second, if counterparties begin posting staked ETH or SOL as repo collateral — assets whose withdrawal may be subject to unbonding delays — Armada must explicitly address encumbrance and liquidity haircut policy for staked collateral to avoid settlement risk.