One early winner of the stablecoin craze is Alexander Hamilton’s 241-year-old bank
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One early winner of the stablecoin craze is Alexander Hamilton’s 241-year-old bank
Ripple announced Tuesday that Bank of New York Mellon would become the primary custodian for the reserve assets of its $500 million stablecoin Ripple USD. The New York bank that can trace its roots back to 1784 and one of country’s founding fathers will manage the mix of US Treasury bills and other notes owned by Ripple. BNY also already serves as a custody bank for the Reserve assets of Circle’s (CRCL) stablecoin USDC, the world’s second largest. At least two big Wall Street institutions — Morgan Stanley (MS) and Charles Schwab (SCHW) — plan to offer cryptocurrencies through their wealth management platforms sometime next year.
The latest sign came Tuesday when major crypto firm Ripple announced that Bank of New York Mellon (BK), also known as BNY, would become the primary custodian for the reserve assets of its $500 million stablecoin Ripple USD (RLUSD).
The New York bank that can trace its roots back to 1784 and one of country’s founding fathers will manage the mix of US Treasury bills and other notes owned by Ripple while also offering Ripple technology and other transaction banking services to underpin its stablecoin operations.
BNY also already serves as a custody bank for the reserve assets of Circle’s (CRCL) stablecoin USDC, the world’s second largest. Ripple’s RLUSD is the world’s eighth-largest by circulating market capitalization.
BNY offices in New York City. REUTERS/David ‘Dee’ Delgado · REUTERS / Reuters
Stablecoins are cryptocurrencies pegged to assets such as the US dollar. They also serve as the lifeblood of the crypto world, accounting for the bulk of its transaction volume.
Jack McDonald, senior vice president of stablecoins at Ripple, called BNY “the ideal partner” for its stablecoin initiative in a statement.
“BNY brings together demonstrable custody expertise and a strong commitment to financial innovation in this rapidly changing landscape,” McDonald added in the statement.
All of Wall Street is now trying to figure out how they can take advantage of what is expected to be wider adoption of stablecoins as potential legislation setting rules around stablecoins makes its way through Congress with the blessing of President Trump.
Circle’s stock has soared since going public last month and a group of big banks, including JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), and PNC (PNC), are discussing the prospect of offering stablecoins in a collaborative effort, according to people familiar with the matter.
Banks are also eyeing other crypto activities. At least two big Wall Street institutions — Morgan Stanley (MS) and Charles Schwab (SCHW) — plan to offer cryptocurrencies through their wealth management platforms sometime next year. Charles Schwab already offers margin loans against customer holdings of crypto exchange traded funds.
But if there is one financial institution with a clear head start in making money off stablecoins and other digital assets, it is BNY.
The massive custody bank was the first major US bank to launch a crypto custody service back in October 2022 after getting specific regulatory approval.