PANews reported on March 13 that according to The Information, as banks become more receptive to cryptocurrencies, Bank of New York Mellon (BNY) is expanding the services it provides to stablecoin issuer Circle. Sources say the bank will allow some clients to remit funds to or receive funds from Circle for the purpose of purchasing or selling Circle's stablecoins. Previously, Circle's clients had to use small U.S. banks to remit funds to Circle, which may have limited the growth of the stablecoin company.
This new arrangement helps facilitate the creation and redemption of Circle's stablecoins and can help the New York-based Circle drive more widespread adoption of its dollar-pegged stablecoin by traditional financial institutions. The two companies said in a joint statement: "BNY and Circle will continue to work to bridge the gap between traditional finance and digital finance, and explore how to deepen our relationship to benefit the financial markets." The report said these changes would help make Circle more attractive to investors ahead of a potential initial public offering (IPO).
The collaboration with BNY is noteworthy because the bank is a Global Systemically Important Bank (G-SIB), a regulatory designation that subjects it to particularly strict oversight. Using a large U.S. bank like BNY is a way for Circle to differentiate itself from competitors like Tether. Some sources say BNY has obtained approval from the New York State Department of Financial Services to provide a broader range of payment services to Circle. By servicing Circle, BNY may also attract more crypto-related deposits. Sources previously said the bank has been cautious in discussing providing banking services to more crypto companies, only collaborating with the safest ones.
