BNY Enables Institutional USDC Minting and Redemption

BNY Mellon adds USDC minting, redemption and custody

BNY Mellon has expanded its Digital Asset Custody platform to let institutional clients mint, redeem, hold and transfer USDC directly through the bank. The update moves BNY beyond its existing role as primary custodian of USDC reserves and gives clients a bank-regulated pathway to convert U.S. dollars into Circle’s stablecoin and back without leaving BNY’s custody environment.

What the new service offers

Under the enhancement, institutional customers can:

• Convert U.S. dollars to USDC (minting) and redeem USDC back to dollars from inside BNY’s custody platform.
• Store USDC under BNY’s custody framework and initiate transfers of the stablecoin from the same interface used for other digital assets.

Circle remains the issuer of USDC and continues to oversee issuance policies, while BNY’s platform adds direct client-facing operational capabilities around the token. BNY also said it intends to roll out support for additional stablecoins and digital cash workflows over time, though it did not provide a timetable or name the next assets under consideration.

Context: why this matters for institutional crypto

This move brings stablecoin minting and redemption closer to the custody, settlement and accounting systems that large institutions already use. For asset managers, corporates and banks that prioritize regulated infrastructure, being able to issue and redeem USDC inside a trusted custodian reduces operational complexity and counterparty fragmentation.

BNY Mellon manages roughly $59.3 trillion in assets under custody and administration and serves more than 90% of Fortune 100 companies, according to the bank. Integrating USDC into its digital custody offering gives those clients a direct, bank-based route to access stablecoin liquidity and on-chain payment rails without relying on nonbank custodians or separate exchange accounts.

Market scale and competitive landscape

USDC is the second-largest stablecoin by market capitalization, with more than $73.8 billion circulating, while the broader stablecoin market is valued at about $313 billion, per DefiLlama metrics. Tether’s USDT remains the largest stablecoin.

BNY’s expansion follows a broader trend among banks and asset managers building regulated products and reserve vehicles tied to stablecoins. Recent examples include:

• Invesco filing to launch a tokenized money market fund intended to support stablecoin reserve management.
• JPMorgan’s proposal for an Ethereum-based tokenized money market fund aimed at stablecoin issuers.
• State Street launching a government money market fund for stablecoin issuers, with institutional backers such as State Street Bank and Anchorage Digital.
• Fidelity’s introduction of a U.S. dollar-backed stablecoin (FIDD) after receiving conditional approval to operate a national trust bank.

These initiatives show major financial firms are focusing on the reserve, custody and payment layers that underpin stablecoin issuance and on-chain settlement.

BNY’s broader digital asset strategy

The USDC update builds on BNY’s recent digital asset activity. In May, the bank partnered with Abu Dhabi-based Finstreet and the ADI Foundation to develop institutional custody services for Bitcoin and Ether, with plans to extend services to stablecoins and tokenized real-world assets in later phases. By layering minting and redemption on top of custody, BNY is aligning stablecoin flows with traditional settlement and treasury workflows used by institutional clients.

Implications and outlook

For institutions, this integration reduces friction for on-chain payments, treasury management and tokenized cash operations while keeping assets inside a regulated custody framework. For the stablecoin ecosystem, bank-hosted mint/redeem rails can boost institutional adoption by combining on-chain efficiency with established compliance, custody and reporting standards.

Regulatory scrutiny and market dynamics will influence how quickly other custodians and banks expand similar services. Still, BNY’s step signals growing demand from large institutions for regulated digital cash infrastructure and highlights a shift: instead of bypassing traditional banks, many enterprises want banks to be the gateway to tokenized cash and stablecoin liquidity.

As BNY adds further stablecoins and digital cash workflows, institutional users can expect tighter integration between tokenized liquidity and conventional custody, settlement and treasury systems—an important development for the maturation of institutional crypto services.