BNY expands partnership with Circle to offer USDC stablecoin services for institutions

BNY, the largest custodian bank in the United States, is deepening its relationship with stablecoin issuer Circle. The expanded partnership will bring USDC minting, custody, and redemption services directly onto BNY’s digital asset platform for institutional clients.

The bank announced the move on July 3. USDC becomes the first stablecoin supported on BNY’s institutional custody platform. Clients will be able to store and transfer USDC through the bank’s existing banking infrastructure. They can also mint new USDC by depositing US dollars, or burn USDC to redeem dollars – all within a single, regulated banking interface.

Initial support covers USDC on Ethereum and Solana. That means institutional flows on two of the most actively used networks for the stablecoin will now pass through BNY’s back office.

BNY already serves as a key custodian for USDC’s reserve assets – the cash and Treasuries that back each token. The expanded arrangement goes further: it lets clients manage the full lifecycle of the stablecoin without leaving BNY’s system.

Circle pointed to rising institutional demand for regulated digital-asset infrastructure that sits alongside traditional banking. “We are seeing clear demand from institutions for digital asset services that operate under the same compliance and risk frameworks as their existing banking relationships,” a Circle representative said.

The bank itself framed the move as a way to bring digital assets safely into the mainstream of corporate treasury and payments work. BNY has been steadily building out its crypto capabilities. Earlier this year, it launched a tokenized deposit service for clients including Intercontinental Exchange and Citadel Securities. It also provides custody for US spot Bitcoin and Ether exchange-traded funds.

The partnership indicates that stablecoins are no longer just tools for crypto traders. They are becoming part of financial infrastructure – used for payments, treasury management, and tokenized products. By integrating minting and redemption directly into a bank platform, BNY is blurring the line between crypto settlement and traditional banking.

BNY said it plans to extend support beyond USDC to other stablecoins down the line. For now, institutions get a single interface to issue, hold, and redeem the second-largest stablecoin by market cap. The bank’s existing custody relationships with ETF issuers and clearing firms give it a natural distribution channel.

The next milestone to watch: whether BNY adds other stablecoins like USDT or yield-bearing alternatives, and how quickly institutional volume migrates on-chain through the platform.