BNY and Galaxy Digital have announced a partnership to integrate institutional crypto staking into BNY's Digital Asset Custody platform. The agreement, announced on Aug. 4, 2026, aims to let eligible institutional clients earn staking rewards without transferring assets to an external provider.

The planned service would unite custody, staking, tax reporting, fund accounting, and client reporting within a single system. It remains subject to regulatory approval before it can launch.

Integrated Custody and Staking Model

BNY, the oldest bank in the United States and the country's largest custody bank, intends to allow eligible institutional clients to generate staking rewards while retaining assets inside its existing custody framework. Clients would continue to have access to the bank's reporting, accounting, and tax support tools.

The design targets pension funds, insurers, and asset managers that demand strict controls over digital assets. Such organizations frequently encounter additional compliance burdens when moving assets outside established custody arrangements to access staking. Keeping assets in custody throughout the staking process also addresses concerns about counterparty risk that arise when institutions delegate holdings to third-party staking providers.

Galaxy Digital will supply the validator technology powering the staking service. Its infrastructure supports proof-of-stake networks by processing transactions, securing the network, and distributing rewards. Galaxy operates validators across networks including Ethereum and Solana. The company reported approximately $3.2 billion in staked assets as of March 31, 2026, and will also serve as a design partner for BNY's broader digital asset platform.

Unified Reporting and Rewards

The proposed service would consolidate custody, staking rewards, fund accounting, and tax reporting under one operational structure. This approach could allow institutions to manage digital assets through the same systems they already use for traditional investments.

BNY already supports bitcoin and ether custody and provides services for numerous United States spot crypto ETFs. The bank launched tokenized deposit services in January 2026 and added USDC custody support in June. BNY managed $62.6 trillion in assets as of June 30. The staking initiative builds on a multi-year expansion of the bank's digital asset capabilities and reflects a broader pattern among major custody banks adding crypto services as institutional demand for regulated exposure to digital assets grows.

Regulatory and Risk Considerations

The staking service cannot launch until it receives the required regulatory approvals. U.S. regulators have scrutinized staking programs in recent years, including enforcement actions against retail platforms, which has made regulated banking pathways for staking more attractive to institutional participants. BNY has not yet confirmed which cryptocurrencies will qualify or which institutional clients will receive access first.

Clients will still face staking risks, including validator downtime, slashing penalties, and asset lock-up periods. Tax rules for staking rewards also vary across jurisdictions and continue to evolve.