Ripple, a Crypto asset infrastructure provider for financial institutions, has selected BNY Mellon as the primary reserve custodian for its Ripple USD (RLUSD) stablecoin. According to the company, the move aims to bolster institutional confidence and bridge traditional finance with the crypto world.
Notably, RLUSD was launched under a New York Department of Financial Services (NYDFS) charter and has already surpassed $500 million in circulating supply. Ripple claims that the token is backed 1:1 by high-quality liquid assets, including cash, U.S. Treasury securities, and money market funds.
BNY Custodies RLUSD Reserve
As the first central custody bank to partner with Ripple, BNY will safeguard RLUSD’s fiat and Treasury reserves. It would also support seamless minting and redemption operations, fostering trust through transparent, compliant reserve management.
The partnership will ensure that segregated reserves, monthly attestations by third-party auditors, and clear redemption rights meet the rigorous institutional expectations for stablecoin reserve transparency.
Partnering with a global custodian holding over $50 trillion in assets, Ripples believes RLUSD will grow toward becoming a trusted, enterprise-focused stablecoin. It also views the move as a step towards making RLUSD a potential alternative to larger stablecoins, such as USDC and USDT.
Interestingly, the partnership announcement builds on Ripple’s strategy to deepen ties with the regulated U.S. financial system. It has filed for a national banking charter with the OCC and a Federal Reserve master account, steps intended to bring RLUSD under dual state and federal oversight.
Commenting on the initiative, Ripple’s Senior Vice President of Stablecoins, Jack McDonald, said:
“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.”
Competition Intensifies in the Stablecoin Market
Institutional and corporate interest in stablecoins is intensifying as competition in the crypto industry heats up. Despite Tether (USDT) maintaining market dominance with a share of around 66%, Circle’s USDC has recently surpassed a record market cap of $60 billion. However, the stablecoin market is no longer a two-horse race.
Aside from Ripple’s RLUSD emerging as a serious challenger. Traditional fintech giants are joining the stablecoin race. Stripe has entered the stablecoin market with its recent acquisition of Bridge. Notably, stablecoins are expanding beyond crypto-native applications into mainstream finance, driven by their transformation in digital payments.
