BNY Enhances Institutional Client Solutions with USDC Minting and Redemption Features
BNY has rolled out services for the minting, redemption, custody, and transfer of USDC on its Digital Asset Custody platform, providing institutional clients with direct access to Circle’s stablecoin through the bank.
Summary
- BNY enables institutional clients to mint, redeem, store, and transfer USDC directly via its Digital Asset Custody platform.
- The bank has expanded its partnership with Circle, offering direct client-focused stablecoin services in addition to safeguarding USDC reserves.
- BNY joins prominent financial institutions like Invesco, JPMorgan, and State Street in launching products related to stablecoin reserves and infrastructure.
According to BNY, this update allows clients to convert U.S. dollars into USDC and redeem the stablecoin back to dollars seamlessly from its platform. Clients can also store and transfer USDC through the digital asset custody service, marking Circle’s token as the first stablecoin offered on the platform.
This service further strengthens BNY’s ongoing collaboration with Circle, positioning the bank as the primary custodian for USDC reserves while enhancing its offerings with direct stablecoin services for institutional clients.
BNY aims to incorporate additional stablecoins and digital cash workflows in the future. However, it has not yet disclosed which assets might be added next or provided a timeline for these developments.
BNY is deepening its institutional custody for USDC
BNY oversees $59.3 trillion in assets under custody and administration, serving over 90% of Fortune 100 companies. Its support for USDC provides large institutions with a bank-based pathway to access stablecoin issuance and redemption within a regulated custody environment.
According to DefiLlama data, USDC ranks as the second-largest stablecoin by market capitalization, with over $73.8 billion in circulation. Tether’s USDT holds the title of the largest stablecoin, with the total stablecoin market valued at approximately $313 billion.
This announcement coincides with BNY’s recent steps in digital asset custody. In May, the bank partnered with Abu Dhabi-based Finstreet and the ADI Foundation to establish custody services for Bitcoin and Ether, with future plans to include stablecoins and tokenized real-world assets.
By integrating USDC minting and redemption, BNY is bringing stablecoin activities closer to the custody and settlement systems already employed by institutional clients. While Circle mainly focuses on USDC issuance, BNY’s expanded services equip clients with custody and transaction tools for the token.
Banks are developing products for stablecoin reserves
BNY’s initiative reflects a larger trend among major financial institutions focusing on products associated with stablecoins, reserve assets, and tokenized cash management.
Recently, Invesco filed an application with the U.S. Securities and Exchange Commission to create a tokenized money market fund aimed at managing stablecoin reserves. The fund intends to invest in cash and short-term U.S. Treasury securities.
In May, JPMorgan also submitted a proposal to launch a tokenized money market fund geared toward stablecoin issuers, designed to invest in U.S. Treasury bills and overnight repurchase agreements that underlie payment stablecoins.
Moreover, State Street launched a government money market fund for stablecoin issuers earlier this month, which will invest in U.S. government securities and repurchase agreements, with initial investment from State Street Bank and Anchorage Digital.
Other financial institutions are also exploring stablecoin-related services; for example, Fidelity Investments introduced its USD-backed stablecoin FIDD after receiving conditional approval to operate as a national trust bank.
Together, these developments illustrate how leading banks and asset managers are innovating around the reserve, custody, and payment components of stablecoins in response to the growing institutional demand for digital cash infrastructure.
