BNY Sees Blockchain’s Future Inside the Banking System

Bank of New York Mellon’s (BNY) record second-quarter results announced Wednesday (July 15) were built on some of the oldest activities in finance: safeguarding assets, processing transactions, managing collateral and earning interest on client balances.

The bank reported record revenue of $5.7 billion, up 13% from a year earlier, while assets under custody and administration climbed to $62.6 trillion. BNY’s share price rose on the strength of the earnings and touched a new all-time high of $157.66 following Wednesday’s investor call.

But investors aren’t valuing the oldest bank in the United States like a financial utility. As money movement and corporate treasury services speed up and digitize, BNY is being treated more like a platform positioned to profit from the expanding complexity of global markets.

“Payments, liquidity, collateral, digital assets, and securities markets are becoming more interconnected, creating demand for infrastructure that operates with greater speed, certainty, and resilience. We believe this represents one of the defining opportunities for financial services over the next decade, and it is an area where BNY is well positioned to lead,” BNY Chief Executive Officer Robin Vince said Wednesday, noting the broader financial service landscape’s “shift toward an always-on financial ecosystem.”

BNY is not trying to reinvent itself as a cryptocurrency company. It is attempting something potentially more durable: extending its existing position at the center of global capital markets into the infrastructure connecting conventional money, tokenized assets and blockchain networks.

See also: BNY’s AI Strategy Signals a New Era of Platform Banking

Institutional Blockchain Looks More Like Banking’s Past Than a New Future

The most important signal from BNY’s quarter is that blockchain’s institutional future may not arrive through a clean break with the banking system. It may emerge through incumbent financial institutions gradually adapting custody, payments and asset-servicing platforms to accommodate tokenized money and securities.

The early digital asset economy concentrated value in trading, token issuance and speculative appreciation. BNY’s model is centered on the less visible but more repeatable activities surrounding institutional assets: custody, administration, payments, liquidity, collateral and data.

If securities and cash increasingly exist in tokenized form, institutional clients will still require asset segregation, recordkeeping, regulatory controls, cash conversion, reporting and operational resilience. Blockchain may alter how ownership is recorded or assets are transferred, but it does not automatically eliminate the need for trusted intermediaries. It changes the services those intermediaries must provide.

BNY is positioning itself for precisely that outcome. Its objective is not to decide whether traditional finance or blockchain wins. It is to operate the bridge between them and collect revenue whenever assets cross it. In that environment, custody becomes less about holding assets in one location and more about coordinating assets across networks.

Read also: Crypto Stopped Fighting Banks and Started Copying Them

USDC Turns Custody Into a Two-Way Bridge

BNY is betting that institutions will instead operate across multiple systems, moving value between traditional ledgers and blockchains depending on the asset, jurisdiction and use case. The bank’s expanded relationship with stablecoin issuer Circle shows what that strategy looks like in practice.

USDC is becoming the first stablecoin supported by BNY’s Digital Asset Custody platform. Institutional clients will be able to hold and transfer USDC in BNY custody and, through the bank, instruct Circle to mint USDC from dollars or redeem it back into conventional currency. BNY already serves as the primary custodian of USDC reserves and plans to support additional stablecoin issuers and digital cash workflows over time.

The non-obvious development is not that a large bank will safeguard stablecoins. It is that BNY is assembling reserve custody, token custody, cash management and conversion between fiat and blockchain-based money inside one institutional operating model. That addresses one of the central frictions limiting institutional use of tokenized money. A corporate treasurer or asset manager may be comfortable holding regulated assets at a major custodian but reluctant to stitch together separate banks, crypto custodians, exchanges and technology vendors to move between dollars and digital tokens.

BNY’s proposition is that institutions should not need to leave familiar financial infrastructure to access blockchain networks. The bank can bring blockchain connectivity into the infrastructure they already use. BNY’s advantage is therefore not simply that it offers a digital wallet. It is that blockchain services can be attached to a dozen existing institutional platforms.

The PYMNTS Intelligence and Citi report “Chain Reaction: Regulatory Clarity as the Catalyst for Blockchain Adoption” found that regulation will shape blockchain’s next leap.