BNY makes USDC the first stablecoin on its institutional custody platform

BNY (NYSE: BNY) has stated that it will let institutional clients hold, transfer, mint, and redeem Circle’s USDC through its digital asset custody platform. 

This move extends the bank’s relationship with Circle (NYSE: CRCL), positioning it as the primary hub for stablecoin operations in traditional finance.

BNY made this announcement in a joint press release with Circle on June 29, 2026, giving its clients a single point of access for converting U.S. dollars into USDC and burning the stablecoin back into fiat, eliminating the need for clients to manage separate systems for on-chain and off-chain cash.

CEO Jeremy Allaire stated that the partnership is “a big milestone in the convergence of digital dollars with the global financial system,” writing on X that BNY is now “a primary liquidity and custody hub for USDC.”

How does BNY’s service actually work?

BNY clients who hold USDC in their digital asset custody wallets can instruct Circle to mint new tokens against dollar deposits or redeem existing tokens for dollars. 

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

According to Kash Razzaghi, Circle’s chief commercial officer, regulatory compliance was the reason USDC was selected first. “Making USDC the first stablecoin included in their new offering reflects the regulatory rigor Circle has built into USDC from day one,” Razzaghi stated.

BNY stated that it plans to add support for other stablecoin issuers over time.

What is the existing relationship between BNY and Circle?

The partnership is not new, as BNY already serves as the primary custodian of USDC’s reserve assets. Earlier this year, the bank launched tokenized deposits with Circle among the initial participants alongside Intercontinental Exchange, Citadel Securities, DRW Holdings, Ripple Prime, and Baillie Gifford.

That tokenized deposit service placed on-chain representations of bank deposits on BNY’s private blockchain, targeting collateral and margin workflows. The stablecoin custody offering announced today operates differently, as it handles an existing third-party token (USDC) rather than a BNY-native digital deposit.

In May, BNY also expanded its digital asset custody footprint into the UAE through partnerships with Finstreet and the ADI Foundation in Abu Dhabi Global Market. The bank oversees $59.3 trillion in assets under custody and administration as of December 31, 2025.

Circle’s 2026 institutional push

Circle has been building institutional distribution channels for USDC across multiple geographies. Circle and Nomura disclosed plans in late June 2026 for a corporate USDC settlement service targeting Japanese businesses by 2027. That service would allow companies to convert yen into USDC for cross-border payments and foreign exchange settlements.

USDC holds the second-largest market capitalization among stablecoins at approximately $73.7 billion, only behind Tether’s USDT at $186 billion.

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