BNY, the world's largest custody bank overseeing $59 trillion in assets, is deepening its ties with Circle (CRCL) as the Wall Street bank ramps up its stablecoin services.
The bank said Monday that USDC will become the first stablecoin supported on its Digital Asset Custody platform. Clients will be able to hold USDC in custody at BNY and instruct Circle to convert U.S. dollars into the stablecoin or redeem USDC back into dollars through the bank.
The move expands BNY's role in the USDC ecosystem. The bank already serves as the primary custodian of the reserves backing the stablecoin. The new offering lets institutions manage both their cash and digital assets through a single platform.
BNY said it plans to support additional stablecoin issuers over time.
The announcement comes as stablecoins gain momentum among banks and asset managers following the 2025 passage of the GENIUS Act, the U.S. law establishing a federal framework for U.S. dollar-backed stablecoins. The legislation is widely expected to accelerate institutional adoption by setting rules for reserve assets, disclosures and issuer oversight.
Unlike cryptocurrencies such as bitcoin, stablecoins are designed to maintain a fixed price pegged to a fiat currency, typically to the U.S. dollar and backed with cash and short-term U.S. Treasuries. Originally used primarily by crypto traders on exchanges, they are increasingly finding broader uses in payments, cross-border transfers and securities settlement.
Institutions see significant room for growth. Standard Chartered projected the stablecoin market could expand from roughly $300 billion today to $2 trillion by the end of 2028, while Citigroup estimated it could reach $4 trillion by 2030 in its base case. Circle's USDC is the second-largest stablecoin with a market capitalization of over $73 billion.
"As digital assets become increasingly integrated into financial markets, institutions need infrastructure that seamlessly works across traditional and blockchain-based systems," said Carolyn Weinberg, chief product and innovation officer at BNY.