Payward, the parent company of crypto exchange Kraken, is in discussions with BNY over a potential deal spanning custody, trading, payments, wealth management and digital-asset infrastructure, CoinDesk reported, citing two people familiar with the matter. Both companies declined to comment, and there is no guarantee the talks will result in an agreement.

If finalized, a partnership would pair Payward's push to license the systems behind Kraken to other financial institutions with BNY's established digital-asset custody offering. Institutions using Payward's technology could keep their own customer relationships while relying on its services, giving Payward a route to clients who might never open a Kraken account. For BNY, which already provides custody of digital assets, a deal could broaden what clients are able to do with the assets the bank helps them hold. The pairing would bring together two very different pedigrees: BNY traces its roots to 1784 and ranks among the world's largest custodians of financial assets, while Kraken, founded in 2011, is one of the longest-running cryptocurrency exchanges.

Payward is building a business behind other brands

Payward introduced Payward Services on March 11, offering businesses access to trading, custody, stablecoin payments and funding through a single integration. The platform packages capabilities used within Payward's own operations so that banks, brokerages and payment providers can embed them into their products.

A financial institution adopting the platform would not need to build every component itself. It could select the services it requires and continue managing relationships with its own clients. For Payward, the model creates opportunities to earn business by processing transactions and supplying technology through another company's offering.

Payward's relationship with Nasdaq illustrates how that strategy is developing. In a September 10 announcement, Nasdaq said its venture arm had agreed to invest $100 million in Payward. The two companies also expanded their collaboration on tokenized equities and announced an agreement for Payward to adopt Nasdaq's market-surveillance technology across its trading venues. That arrangement involves investment and technology flowing from both sides, and it demonstrates Payward's ability to pursue broader institutional relationships, though it does not establish the terms of any future BNY deal.

BNY would extend an existing crypto business

BNY's digital-asset custody platform already uses segregated wallets and links digital and traditional holdings for accounting and servicing. The bank first announced plans to hold bitcoin and ether for institutional clients in 2021, making it one of the first major US banks to enter the business. The regulatory footing for such services has also shifted: in January 2025, the Securities and Exchange Commission rescinded SAB 121, an accounting bulletin that required firms safeguarding crypto to record a corresponding liability and asset on their balance sheets, and federal banking regulators subsequently withdrew guidance that had effectively required banks to clear such activities with supervisors first. Any partnership would therefore need to complement capabilities the bank has already built.

One potential application of external infrastructure would be tying custody more closely to trading or payments. For an asset manager, that could reduce the number of providers and separate processes involved in purchasing an asset and moving it into safekeeping. The reported discussions leave the division of those responsibilities unresolved.

What happens after a client places an order

The importance of such connections becomes clear when considering a hypothetical asset manager buying crypto through its existing financial-services provider. A successful trade alone does not complete the purchase: the payment must arrive, the asset must reach the correct custody account, and the manager's records must reflect the new holding. Different companies can handle these steps, and connecting them reliably is part of what an infrastructure provider sells.

These functions illustrate how a service could operate; they do not constitute an agreed BNY–Payward arrangement. For the asset manager, the benefit would be fewer manual transfers or discrepancies to reconcile across providers, though whether a partnership delivers that outcome depends on how well the two companies' systems work together.

Clients would still need to know who holds their assets

Streamlining the process can also make the companies behind it less visible. Clients would still need terms identifying the legal custodian, who authorizes withdrawals, and which provider is responsible for a failed or delayed transaction. Payward's platform announcement identifies different custody entities depending on the service and jurisdiction. BNY's custody page, meanwhile, states that digital assets are not bank deposits and are not FDIC-insured, meaning that using a bank's interface does not give a crypto holding the same protections as money in a deposit account.

Reliance on an outside supplier also raises operational questions. A service interruption could affect clients even when their bank's own systems remain available, making recovery procedures and communication between providers important design considerations.

Any announced agreement would need to spell out the services, eligible clients and responsibilities before its practical value could be assessed. Payward has already set out its ambition to supply financial institutions, and the significance of a BNY deal would lie in whether it makes crypto transactions easier to manage without leaving clients uncertain about who is accountable for their assets.

This article originally appeared on Coindoo.