Key facts
- BNY Mellon now allows institutional clients to custody, mint, and redeem Circle's USDC.
- USDC is the first stablecoin supported on BNY Mellon's Digital Asset Custody platform.
- Clients can convert U.S. dollars to USDC and redeem USDC back to dollars directly through the bank.
- BNY Mellon is the primary custodian of the assets backing USDC.
- The bank plans to support additional stablecoins and digital cash workflows in the future.
- The move aligns with broader institutional expansion into stablecoin infrastructure.
BNY Mellon has expanded its Digital Asset Custody platform to enable institutional clients to custody, mint, and redeem Circle's USD Coin (USDC), making it the first stablecoin supported on the service. This move allows clients to convert U.S. dollars into USDC and redeem USDC back into dollars directly through the bank, in addition to storing and transferring the stablecoin.
The custodian bank, which oversees $59.3 trillion in assets under custody and administration, already serves as the primary custodian for the assets backing USDC. This expansion deepens its relationship with Circle beyond reserve safeguarding to include client-facing stablecoin services. BNY Mellon indicated plans to support additional stablecoins and digital cash workflows in the future.
This development is part of a broader trend of traditional financial institutions expanding their stablecoin services. Recent initiatives include JPMorgan's filing for a tokenized money market fund for stablecoin issuers and State Street's launch of a similar government money market fund. Bank of America is exploring stablecoins for payment infrastructure modernization, and Fidelity Investments launched its own dollar-backed stablecoin, FIDD.
The global stablecoin market is valued at approximately $313 billion, with USDC being the second-largest stablecoin by market capitalization. These stablecoins, pegged to fiat currencies and backed by reserves, are increasingly being adopted for payments, cross-border transfers, and securities settlement, moving beyond their initial use among crypto traders.