BNY has expanded its digital asset custody platform to allow institutional clients to store, transfer, mint and trade Circle’s USD Coin, making it the first stablecoin supported on the platform.
The new capabilities allow BNY customers to convert US dollars to USDC and redeem the stablecoin for dollars directly through the bank while storing and transferring the USDC to its custody platform. BNY said it plans to expand the service to additional stablecoins and digital cashflows over time.
The expansion builds on BNY’s existing role as the primary custodian of assets supporting USDC, extending its relationship with Circle beyond safeguarding reserve assets to include customer-facing stablecoin services.
According to BNY, the custodian bank oversees $59.3 trillion in assets under custody and administration and serves more than 90% of Fortune 100 companies. USDC is the world’s second-largest stablecoin by market capitalization, with more than $73.8 billion in circulation, according to DefiLlama. data.
In May, BNY partnered with Abu Dhabi-based Finstreet and the ADI Foundation to develop institutional child care for Bitcoin (BTC) and Ether (ETH), with plans to later support stablecoins and real-world tokenized assets.
Source: ChallengeLlama
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Traditional finance expands stablecoin infrastructure
BNY’s announcement is the latest in a series of stablecoin-focused products launched by major financial institutions in recent months, as traditional banks and asset managers expand services supporting blockchain-based reserve management, custody and payments.
In May, JPMorgan filed an application to launch a tokenized money market fund this would allow stablecoin issuers to hold reserve assets in a regulated investment vehicle while earning interest. The Ethereum-based fund is designed to invest in U.S. Treasuries and overnight repurchase agreements that support payment stablecoins.
Earlier this month, State Street launched a government money market fund for stablecoin issuers, providing a vehicle to hold reserve assets in accordance with the GENIUS Act. The fund invests in U.S. government securities and repurchase agreements and counts State Street Bank and Anchorage Digital among its initial investors.
Other major financial institutions are suing stablecoin strategies Also. In July 2025, Bank of America said it was exploring stablecoins to modernize its payments infrastructure, while in January, Fidelity Investments launched a Stablecoin backed by the US dollarFIDD, after receiving conditional approval to operate a national trust bank.
The stablecoin market is valued at around $313 billion, according to DefiLlama, with Tether’s USDT accounting for around 60% of the market.
Source: ChallengeLlama
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