BNY Mellon has expanded its Digital Asset Custody platform to allow institutional clients to store, transfer, mint, and redeem Circle’s USD Coin (USDC), marking the first stablecoin supported on the platform. The move deepens the bank’s existing relationship with Circle, where it already serves as the primary custodian of the reserves backing USDC.
New stablecoin capabilities for institutional clients
The expanded service enables BNY Mellon clients to convert US dollars into USDC directly through the bank, and to redeem the stablecoin back into dollars when needed. Clients can also store and transfer USDC within the custody platform. BNY Mellon has indicated it plans to extend the service to additional stablecoins and digital cash workflows over time.
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BNY Mellon oversees approximately $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 over $73.8 billion in circulation, according to DefiLlama data.
Deepening the Circle partnership
The announcement builds on BNY Mellon’s existing role as the primary custodian of the assets that back USDC. The bank has now extended its relationship with Circle beyond simply safeguarding reserve assets to include client-facing stablecoin services. This represents a significant step in integrating stablecoin infrastructure within traditional banking frameworks.
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In May 2026, BNY Mellon also partnered with Abu Dhabi-based Finstreet and the ADI Foundation to develop institutional custody services for Bitcoin (BTC) and Ether (ETH), with plans to later support stablecoins and tokenized real-world assets.
Traditional finance expands stablecoin infrastructure
BNY Mellon’s announcement is part of a broader trend of major financial institutions launching stablecoin-focused products. In recent months, traditional banks and asset managers have been expanding services that support reserve management, custody, and blockchain-based payments.
- JPMorgan filed in May to launch a tokenized money market fund allowing stablecoin issuers to hold reserve assets in a regulated investment vehicle while earning interest. The Ethereum-based fund is designed to invest in US Treasury bills and overnight repurchase agreements that back payment stablecoins.
- State Street launched a government money market fund for stablecoin issuers earlier this month, offering a vehicle to hold reserve assets in compliance with the GENIUS Act. The fund invests in US government securities and repurchase agreements.
- Bank of America said in July 2025 it was exploring stablecoins to modernize its payments infrastructure.
- Fidelity Investments launched a US dollar-backed stablecoin called FIDD in January 2026, after receiving conditional approval to operate a national trust bank.
The stablecoin market is currently valued at approximately $313 billion, according to DefiLlama, with Tether’s USDT accounting for about 60% of the market.
Why this matters
BNY Mellon’s move signals that major custodial banks are beginning to treat stablecoins as a standard part of institutional digital asset services. By enabling direct minting and redemption of USDC through a regulated bank, the offering bridges the gap between traditional finance and the digital asset ecosystem. This could encourage more institutional participation in stablecoin markets and potentially influence how other large banks approach digital asset custody.
Conclusion
BNY Mellon’s addition of USDC minting and redemption to its institutional custody platform represents a notable development in the convergence of traditional banking and digital assets. As the bank plans to expand support to additional stablecoins and digital cash workflows, the move may set a precedent for how large custodians integrate stablecoin services within regulated financial infrastructure.
FAQs
Q1: What new services is BNY Mellon offering for USDC?
BNY Mellon now allows institutional clients to mint USDC from US dollars, redeem USDC back into dollars, and store or transfer USDC on its Digital Asset Custody platform.
Q2: Why is this significant for the stablecoin market?
This marks the first time a major US custodian bank has offered direct minting and redemption of a stablecoin to institutional clients, potentially increasing trust and adoption of stablecoins within traditional finance.
Q3: Will BNY Mellon support other stablecoins?
Yes, BNY Mellon has stated it plans to expand the service to additional stablecoins and digital cash workflows over time.
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