By Hannah Lang
(Reuters) – Circle Internet Financial has selected Bank of New York Mellon Corp as primary custodian for its reserves of USD Coin, a stablecoin cryptocurrency whose value is directly pegged to the U.S. dollar, the crypto operator said on Thursday.
The new partnership will help link the traditional capital market with the market for digital assets, Circle said in a news release.
As cryptocurrencies rise in popularity — surpassing $3 trillion in value in November, according to crypto data provider CoinGecko — the banking system is slowly warming to the idea of working more closely with digital currency companies.
“We are at a point in the evolution of our industry where the digitization of assets is presenting new and exciting opportunities to a broad range of market participants,” Roman Regelman, BNY Mellon’s chief executive officer of asset servicing and head of digital, said in the release.
Circle is the principal operator of USD Coin (USDC), which has a nearly $52.4 billion market capitalization, according to CoinGecko.
The Boston-based company in February said it was valued at $9 billion under new deal terms with Concord Acquisition Corp, a blank-check firm. Blank-check firms, or special purpose acquisition companies (SPACs), are shell companies that raise funds through a listing to acquire a private company and take it public.
Last summer, Grayscale, the world’s largest digital currency manager, chose BNY Mellon to run accounting and administration of its Grayscale Bitcoin Trust.
BNY Mellon also announced last year that it would hold, transfer and issue bitcoin for its asset management clients, in one of the first announcements of its kind by a major Wall Street bank.
In January, BNY Mellon Chief Financial Officer Emily Portney said in an interview that U.S. regulators should provide more clarity on the rules of the road for cryptocurrencies and other digital assets amid confusion over what activities are allowed.
(Reporting by Hannah Lang in Washington; editing by Jonathan Oatis)