The Bank of New York Mellon Corporation will become the primary custodian of Ripple's stablecoin reserves, the companies announced Wednesday, in a partnership that's being hailed as a landmark in the process of cryptocurrencies entering the mainstream.
Ripple is a San Francisco-based provider of distributed ledger technology and the issuer of altcoin XRP as well as a stablecoin, RLUSD. The stablecoin is technically issued by Standard Custody & Trust Company, a wholly owned subsidiary of Ripple Labs.
Ripple and New York-based BNY said they are "jointly committed to paving the way for digital asset adoption at institutional scale" and bridging the gap between traditional finance and crypto ecosystems.
"Given the rate of transformation in the market and as the industry matures, we are consistently innovating alongside leaders in the field," said Carolyn Weinberg, BNY's chief product and innovation officer.
BNY will serve as the primary reserve custodian of RLUSD, and it will provide transaction banking services to underpin RLUSD's operations; Ripple will continue to manage the RLUSD reserves.
The announcement comes at a time when the Genius Act, a bill that would set official rules for payment stablecoins in the U.S. and legitimize their use, appears to be on the brink of becoming law. Several crypto companies, including Circle and Ripple, have
Ripple says its RLUSD stablecoin is purpose-built to be used by companies for cross-border payments. It's backed by a segregated reserve of cash and cash equivalents and redeemable 1:1 for U.S. dollars, according to a Ripple spokeswoman. Because Ripple's Standard Custody subsidiary is chartered and supervised by the New York State Department of Financial Services as a limited purpose trust company, its stablecoin is required to be backed 100% by highly liquid, short-term, transparent reserves, the Ripple spokeswoman said.
As banks consider their strategies, other big names are also considering a role for digital assets.
Ripple's altcoin, XRP, is the subject of a
The New York judge overseeing the case set a $125 million penalty and barred the company from future violations of the Securities Act. Last month, the judge
About a week ago, Garlinghouse posted on X that "Ripple is dropping our cross appeal, and the SEC is expected to drop their appeal, as they've previously said. We're closing this chapter once and for all, and focusing on what's most important — building the Internet of Value. Lock in."
Some observers described the Ripple-BNY deal as significant.
"This is not just another crypto partnership — this is a 240-year-old Wall Street giant basically saying 'stablecoins are legit,'" said investor and author Paul Barron on X. "Traditional banks are finally embracing digital assets at scale; cross-border payments are about to get way faster and cheaper and other major banks are watching closely — domino effect incoming? The bridge between old money and new money is officially being built."
Max Zhang, CEO of the technology consulting firm CTOL Digital Solutions, called the BNY-Ripple partnership a turning point. "By choosing America's oldest bank as the custodian for its enterprise-grade stablecoin, RLUSD, Ripple is reshaping the landscape for regulated digital assets," he wrote in a LinkedIn post.
