BNY Mellon to accept bitcoin; home price boom continues

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Big step for bitcoin

Bank of New York Mellon, “the nation’s oldest bank,” said Thursday it will “hold, transfer and issue bitcoin and other cryptocurrencies on behalf of its asset-management clients,” the Wall Street Journal reported. “BNY Mellon’s announcement marks the first time one of the big custody banks has unveiled a road map for treating digital currencies as any other asset. And the bank hasn’t put limits on the kinds of digital assets it will allow clients to store there.”

“It is a big step for Wall Street’s back-office banks, whose concerns over regulatory, legal and stability risks left them reluctant to come into direct contact with crypto markets. But as prices of bitcoin and other digital assets have continued to rise, they have become more popular with asset managers, hedge funds and other institutional investors.”

BNY Mellon’s announcement, and a similar one by Mastercard on Wednesday, helped boost the price of bitcoin to a new record high Thursday of more than $48,000, the Financial Times reported. The move by the two companies “edges digital assets closer to mainstream use in ordinary purchases and as an investment.”

But many corporate CFOs aren’t jumping on the bitcoin bandwagon, the Journal says. “Some point to the volatile price of bitcoin, which could have negative effects on their balance sheets, and question whether the practical uses of bitcoin are worth the risk. Companies’ investing policies in some cases prohibit them from holding digital assets.”

Wall Street Journal

Homebuyer surge

“The median sales price for existing homes in each of more than 180 metro areas tracked by the National Association of Realtors rose in the fourth quarter from a year earlier, the second consecutive quarter that every metro area tracked by NAR posted an annual price increase, marking the first time this milestone has been achieved in back-to-back quarters.”

“The latest data underscores how the home-price rally has become much more widespread and continues to gain momentum. In the fourth quarter, 161 metro areas posted double-digit-percentage price increases, up from 115 metro areas with double-digit gains in the third quarter. Demand for homes has surged in the past year as buyers took advantage of record-low interest rates and the pandemic prompted many households to seek bigger houses that could better accommodate remote work.”

… And homebuyer remorse

But some of those buyers now regret the decision, largely because they didn’t do due diligence before they signed.

“Fleeing small apartments, buying vacation homes or simply looking for a change of scenery amid the crushing boredom of lockdowns, people scrambled to buy houses amid the pandemic, spurring bidding wars and supercharging real-estate markets across the country. Now, many are discovering the pitfalls of these hasty purchases, ranging from buyers’ remorse and financial strain to damage caused by unexpected problems.”

Financial Times

On the shelf

Commerzbank “is shelving its dividend for the next two years as Germany’s second-largest listed lender embarks on aggressive cost cuts in an effort to return to profitability. The decision to suspend payouts came as Commerzbank slumped to a loss for last year of €2.9 billion, its worst since the financial crisis,” as it “tripled its provisions for bad loans to €1.8 billion for last year. The lender also booked €841 million of restructuring costs.”

CEO Manfred Knof “last month warned the bank would axe one in three jobs in its domestic market, as part of an effort to cut its cost base by a fifth by 2024. The plan involves closing almost half its branches in Germany. As part of the restructuring, Commerzbank said in a statement on Thursday that it would not pay dividends for this year and next.”

New York Times

Yellen and Tubman

“The effort to make Harriet Tubman the face of the $20 note got a bipartisan push this week as two senators urged Treasury Secretary Janet L. Yellen to prioritize the planned redesign that stalled during the Trump administration. Senator Jeanne Shaheen, Democrat of New Hampshire, and Senator Ben Sasse, Republican of Nebraska, sent a letter to Ms. Yellen this week making the case that America’s currency should reflect the diversity of the country.”

“We stand ready to offer any support for your efforts to ensure this towering figure in our nation’s history receives the recognition she has deserved for so long,” the two senators wrote.

Quotable

“Digital assets are becoming part of the mainstream.” — Roman Regelman, chief executive of BNY Mellon’s asset servicing and digital businesses, which said Thursday it will hold, transfer and issue bitcoin and other cryptocurrencies for its asset management clients.