BNY expands stablecoin offerings for institutional clients

• Key insight: USDC is the first stablecoin on BNY's Digital Asset Custody platform, which aims to link fiat and digital asset custody within one institutional framework.
• Expert quote: "Having the infrastructure to utilize stablecoin — and seeing a bank like BNY take steps forward on that — is where we're seeing more of the use cases and more of what stablecoin looks like paired within the existing ecosystem." — Bridget Hall, real-time payments leader, ACI Worldwide
• Forward look: BNY said it plans to add support for additional stablecoin issuers and digital cash workflows going forward.

The Bank of New York Mellon announced that its stablecoin infrastructure will allow institutional clients to store, transfer, mint and burn USDC. 

The nation's oldest bank deepened its relationship with global fintech Circle Internet Group on Monday, allowing institutions to manage both their cash and USDC assets through a single platform. BNY said it plans to expand support to additional stablecoin issuers and digital cash workflows in the future.

Since April 2022, BNY has safeguarded the majority of the dollar reserves backing USDC, the second-largest stablecoin with a market cap of $74 billion.

"As digital assets become increasingly integrated into financial markets, institutions need infrastructure that seamlessly works across traditional and blockchain-based systems," BNY Chief Product and Innovation Officer Carolyn Weinberg said. 

Bridget Hall, who serves as a real-time payments leader at ACI Worldwide, said that stablecoin is "becoming less theory and more reality for banks" who must figure out how to situate cryptocurrency and tokenized deposits alongside other payment rails. She said BNY's expanded infrastructure gives institutional customers "more control" over the way they use stablecoin "within the controlled and regulated environment they're used to working in."

"Having the infrastructure to utilize stablecoin — and seeing a bank like BNY take steps forward on that — is where we're seeing more of the use cases and more of what stablecoin looks like paired within the existing ecosystem," Hall added.

USDC is the first stablecoin on BNY's Digital Asset Custody platform. The program aims to support the "full lifecycle of institutional stablecoin activity," and directly link fiat and digital asset custody within a "single institutional framework," according to the release.

ACI Chief Strategy and Growth Officer Phil Bruno called BNY's decision a "smart move," noting that the infrastructure is "more seamless and certainly more cost-effective" for corporate clients.

"Once you get customers to bring money inside your walls, you want to keep it there," Bruno said. "I think what [BNY has] done is they're trying to make it easy for the on ramp and off ramp to happen seamlessly. It keeps it all within their environment."

A day after the announcement, Circle's stock plummeted following the June 30 launch by Open Standard of Open USD, a new dollar-backed stablecoin with support from more than 140 companies — including BNY.

Analysts at KeyBanc Capital Markets wrote that they "view the news as negative given potential USDC supply growth challenges and incremental competition from a group of partners with collective scale and powerful global distribution."

However, William Blair analysts Andrew Jeffrey and Adib Choudhury advised investors in a note on Tuesday afternoon that "competitive fears" were "overblown." 

"New entrants will struggle to replicate Circle's model, in our opinion, and the stated rationale such as reserve income sharing is duplicative," the William Blair analysts wrote.

In July 2025, BNY became the primary custodian of blockchain company Ripple's stablecoin reserves. The announcement shortly predated the passage of the GENIUS Act, which created a comprehensive federal regulatory framework for payment stablecoins and catalyzed Wall Street's embrace of the fiat-backed cryptocurrency.  

Earlier this month, State Street launched a Stablecoin Reserves Money Market Fund that provides cash banking infrastructure for managing reserves. The move follows similar tokenization efforts from large firms like JPMorganChase, Mastercard and BlackRock.

Standard Chartered has projected the stablecoin market could expand from its current $300 billion to $2 trillion by the end of 2028, while Citi estimated that the market cap could reach $4 trillion by 2030.