“Ripple and BNY are jointly committed to paving the way for digital asset adoption at institutional scale and together are bridging the gap between the traditional finance and crypto ecosystems,” BNY said in a news release Wednesday (July 9).
Via the partnership, BNY will act as the primary reserve custodian for Ripple’s RLUSD stablecoin, using its “deep technology stack and expertise enabling the digital assets ecosystem,” the release said.
This expands on BNY’s record of providing end-to-end services across stablecoin infrastructure and extends the bank’s efforts for further interoperability between stablecoins and traditional assets, according to the release.
“Ripple USD addresses a critical gap in the market as a stablecoin developed for enterprise-grade financial use cases, designed to meet the rigorous standards of leading financial institutions,” Jack McDonald, senior vice president of stablecoins at Ripple, said in the release. “BNY brings together demonstrable custody expertise and a strong commitment to financial innovation in this rapidly changing landscape, as well as a forward-thinking approach to digital asset infrastructure, making them the ideal partner for Ripple and RLUSD.”
The announcement followed reports from earlier this year that BNY was deepening its relationship with stablecoin issuer Circle, allowing some clients to send money to and from the company to buy or sell Circle’s stablecoins.
Meanwhile, the banking industry is increasingly embracing stablecoins. Four of the biggest banks in the United States — J.P. Morgan Chase, Bank of America, Wells Fargo and Citigroup — are exploring the development of a jointly operated stablecoin.
It would be “a digital dollar designed not by Silicon Valley startups or crypto-native firms, but by Wall Street’s old guard,” PYMNTS reported in May.
The effort marks a departure from the early crypto philosophy of disrupting incumbent financial players. It’s a bet that those incumbents are best positioned to drive the mainstreaming of digital dollars.
“When you think about the needs of every FinTech or payments company, or a bank that wants to enter the [stablecoin] space, they need secure infrastructure, from the creation of assets, such as tokenizing them, to holding them, and of course moving them,” Utila co-founder and CEO Bentzi Rabi told PYMNTS in March.
“Everyone will enter the stablecoin era in the end,” Rabi added.
