America's oldest bank is coming to crypto, and it's working with several crypto firms in the process.

BNY Mellon received approval from New York's financial regulator to start receiving select customers' bitcoin and ether deposits this week, bringing the world's largest custody bank — with over $43 trillion in assets under custody — into the crypto sphere. 

BNY Mellon has two unique characteristics when it comes to launching crypto services, Caroline Butler, CEO of custody services at the bank, told The Block in an interview. "We are ready to support other assets and are fully interoperable with traditional space, being a bridge between traditional and the digital world is something institutional clients value," Butler said. 

Butler went on to say the bank backs innovation by collaboration — and, with this in mind, the bank is working with several crypto firms on its crypto offering. The firms include Fireblocks, Chainalysis and Blockdaemon.

The bank will offer direct custody to clients, meaning customers will be accepted based on the bank's own risk assessment, according to Butler. It will then use Fireblocks' Multi-Party Computation technology to store customers' private keys. The MPC technology enables multiple parties — each holding their own private data — to evaluate a computation without ever revealing any of the private data held by each party. 

This means customers' private keys will be held in BNY and never seen by Fireblocks. This approach to risk management is front and center for the bank, Butler told The Block. 

Blockchain analytics firm Chainalysis will work with BNY Mellon on compliance monitoring. Specifically, the analytics firm will work with the bank to track where customer assets came from before they arrived in their accounts. 

Fireblocks and Chainalysis are the two main firms BNY Mellon will be working with, while also leveraging other firms, such as Blockdaemon. The New York-based startup builds blockchain nodes that will allow the custody bank to process a high volume of digital-asset transactions. Several firms — including Coinbase, Standard and Komainu — also use Blockdaemon's services. 

The bank's head of custody also noted that BNY Mellon has a track record of working with native institutional players in the space, including Grayscale and Circle. BNY Mellon handles fund account and administration functions for the Grayscale Bitcoin Trust since October of last year, while also handling custody for Circle's USDC reserves.