Compliant Marketing Battle: USDC Announces BNY Mellon as Reserve Custodian, Further Exploring Digital Currency Settlement Possibilities

The issuer of the stablecoin USDC, Circle, has announced that it has chosen the bank in New York Mellon Bank as the custodian for USDC. This move is one of Circle's latest compliance strategies since becoming a fully reserved bank in August last year.

New York Mellon Bank's Layout

Founded in 1784, the United States' oldest bank with assets totaling $46.7 trillion, "New York Mellon Bank" BNY Mellon will become the reserve custodian of the second largest stablecoin in US dollars, USDC.

As early as February last year, New York Mellon Bank announced the launch of Bitcoin custody services, partnering with Bakkt, a Bitcoin futures exchange under Intercontinental Exchange (ICE), to provide custody and transfer services to its users, aiming to become the industry's first custody platform applicable to both traditional and digital assets.

In April last year, "Skybridge Capital," which had previously submitted a Bitcoin ETF application, also chose New York Mellon Bank as its service custodian.

Roman Regelman, head of digital business at New York Mellon Bank, stated in a press release that they will further explore the possibility of using digital cash for settlements.

Circle's Compliance Journey

USDC has grown rapidly over the past year, especially in its adoption in the DeFi sector. However, in the third quarter of last year, USDC faced some regulatory setbacks, including Coinbase changing its USDC reserve narrative and an investigation into the revenue solution "Circle Yield."

As of now, USDT still leads with a market value of $82 billion, while USDC ranks second with $51.4 billion.

Circle founder Jeremy Allaire commented on this collaboration, stating that it is a way to build bridges between traditional finance and the emerging digital asset market without sacrificing trust.

It is reported that this collaboration will allow New York Mellon Bank to further expand its investments, custody of digital assets, and settlement based on digital currencies.

As an asset born from emerging technologies, USDC should have custodial options that are more specialized in blockchain technology. The collaboration with New York Mellon Bank seems to cater more to regulatory agencies, but it also aligns with Circle's past compliance strategy.