Woofun AI reports that BNY has integrated USDC minting and redemption capabilities into its Digital Asset Custody platform, marking the first stablecoin supported for institutional storage and transfer. This expansion allows clients to convert US dollars into USDC and redeem the stablecoin back into dollars directly through the bank without external intermediaries. The move extends BNY's existing relationship with Circle beyond safeguarding reserve assets to include direct client-facing stablecoin services.

Structurally, this development leverages BNY's position as the primary custodian for the assets backing USDC, which currently holds a market capitalization exceeding $73.8 billion. BNY oversees $59.3 trillion in total assets under custody and administration, serving more than 90% of Fortune 100 companies. The bank intends to broaden these services to additional stablecoins and digital cash workflows in future phases.

Notably, this initiative follows a May partnership between BNY, Abu Dhabi-based Finstreet, and the ADI Foundation to develop institutional custody services for BTC and ETH. That collaboration included plans to eventually support stablecoins and tokenized real-world assets, aligning with the current USDC integration.

Woofun AI data shows the broader stablecoin market is valued at approximately $313 billion, with Tether's USDT accounting for about 60% of the total volume.

The announcement reflects a wider trend among major financial institutions launching stablecoin-focused products to support reserve management and blockchain-based payments. In May, JPMorgan filed to launch a tokenized money market fund enabling stablecoin issuers to hold reserve assets in a regulated vehicle while earning interest on US Treasury bills. Earlier this month, State Street introduced a government money market fund for stablecoin issuers compliant with the GENIUS Act, featuring initial investors including State Street Bank and Anchorage Digital.

Other large entities are actively pursuing similar strategies to modernize payment infrastructure. In July 2025, Bank of America stated it was exploring stablecoins for this purpose, while Fidelity Investments launched the US dollar-backed stablecoin FIDD in January after receiving conditional approval to operate a national trust bank. This marks a decisive shift where traditional banks transition from passive observers to active participants in the stablecoin ecosystem.