BNY is reportedly handling additional services for Circle.
The bank will allow some clients to send money to and from the stablecoin company to buy or sell Circle’s stablecoins, The Information reported Wednesday (March 12), citing unnamed sources.
“BNY and Circle continue to work to bridge the gap between traditional and digital finance and are exploring how to deepen our relationship to benefit financial markets,” the two companies said in a joint statement provided to The Information, per the report.
The expanded partnership signals a friendlier regulatory environment for the crypto industry in the United States, according to the report.
It also presents an opportunity for Circle to encourage greater adoption of its stablecoins by other financial institutions, a chance for Circle to differentiate itself from competitors and make itself more appealing to investors ahead of its possible initial public offering, and a way for BNY to attract more deposits tied to the crypto industry, per the report.
Circle said in April 2022 that it selected BNY as custodian for its reserves, which amounted to $52 billion at the time.
With $46.7 trillion in assets under management, BNY gave Circle a partner that would provide Wall Street with confidence in its reserves as well as the prestige that comes with being affiliated with one of America’s oldest banks, PYMNTS reported at the time.
“The opportunity to work with BNY Mellon is one way we build bridges between traditional financial services and emerging digital asset markets, without sacrificing trust,” Circle co-founder and CEO Jeremy Allaire said in an April 2022 press release.
Roman Regelman, who was CEO of asset servicing and head of digital at BNY at the time, said in the release that the bank’s “role as a custodian for USDC reserves supports the broader marketplace and brings value to clients.”
Stablecoins have emerged as one of the most promising digital asset classes, with traditional financial giants exploring their own stablecoin initiatives and with House Financial Services Committee Chairman French Hill of Arkansas saying Tuesday (March 11) that he supports the development of a federal framework for payment stablecoins.
