According to The Information, as banks' attitudes towards cryptocurrencies warm up, Bank of New York Mellon (BNY) is expanding its services for stablecoin issuer Circle. According to informed sources, the bank will allow some customers to transfer funds to or receive payments from Circle via BNY for the purchase or sale of Circle's stablecoins. Previously, Circle's customers had to use small banks in the United States to transfer money to Circle, which could limit the scale of the stablecoin company's development.
This new arrangement facilitates the creation and redemption of Circle stablecoins, which can help New York based Circle promote wider adoption of its stablecoins pegged to the US dollar by other traditional financial institutions. BNY and Circle will continue to work hard to bridge the gap between traditional finance and digital finance, and explore how to deepen our relationship to benefit financial markets, "the two companies said in a joint statement The report states that these changes will help make Circle more attractive to investors before a possible initial public offering (IPO).
The collaboration with BNY is noteworthy as the company is a Global Systemically Important Bank (G-SIB), a regulatory name that puts it under particularly strict supervision. Using large American banks like BNY is a way for Circle to differentiate itself from competitors like Tether. Some insiders have stated that BNY has received approval from the New York State Department of Financial Services to provide Circle with a wider range of payment services. By providing services to Circle, BNY may also attract more cryptocurrency related deposits. Insiders have previously stated that the company has been discussing providing banking services with more cryptocurrency companies, but has been cautious and only collaborates with the safest companies.
