BNY Mellon to Custody Ripple’s RLUSD Stablecoin Reserves – A Wall Street Stamp of Approval?

In a move blending legacy finance with crypto innovation, BNY Mellon just became the first major custodian to back Ripple's upcoming RLUSD stablecoin.

The 238-year-old bank will hold reserve assets for the dollar-pegged token—signaling institutional confidence in Ripple's latest play for the $150B stablecoin market.

Why this matters: When America's oldest bank cosies up to crypto, even skeptics take notice. But remember—this is the same industry that needed 2008 to discover 'risk management'.

Traditional Banking Support for a Blockchain Stablecoin

The Bank of New York Mellon (BNY Mellon), the oldest bank in the United States and one of the world’s largest custodians, will manage the reserves that back each RLUSD token. With over $52 trillion in assets under custody and administration, BNY Mellon brings traditional financial safeguards to a blockchain-native asset.

The partnership is designed to bolster RLUSD’s reliability by ensuring that every token is backed 1:1 by liquid dollar reserves, either in cash or short-term U.S. Treasury bills. According to Ripple, this model aligns with the standards applied to regulated money-market funds.

BNY Mellon’s involvement is not entirely new in the digital asset space. The bank opened its digital asset custody services to institutional clients in 2022 and had already started a dedicated digital assets division in 2021. Its growing presence in the crypto ecosystem reinforces its intent to bridge traditional finance with blockchain-based products.

RLUSD Crosses $500 Million in Circulation

RLUSD, Ripple’s U.S. dollar–backed stablecoin, was introduced in late December 2024 and operates on both the XRP Ledger and Ethereum. Since its rollout, the stablecoin has rapidly gained traction. Just seven months after start, it surpassed $500 million in circulation—a strong indicator of market acceptance.

The stablecoin is part of Ripple’s broader vision to provide reliable, regulated digital assets suitable for enterprise use. RLUSD enters a crowded market dominated by incumbents like USDT and USDC, but Ripple aims to differentiate itself through compliance, banking partnerships, and real-world utility.

Pursuing a Federal Trust Bank Charter

In addition to partnering with BNY Mellon, Ripple is pursuing a national trust bank charter from the U.S. Office of the Comptroller of the Currency (OCC). If granted, this license WOULD allow Ripple to issue RLUSD under direct federal oversight and hold customer deposits within its own trust institution.

Such a MOVE would place Ripple among a growing number of crypto firms seeking official banking status to gain regulatory clarity and provide more robust services to clients. It would also allow the firm to operate under the same framework as federally chartered banks, including compliance with reserve requirements and audits.

Regulatory Tailwinds for Stablecoins

Ripple’s timing aligns with a broader shift in the U.S. regulatory landscape regarding stablecoins. Lawmakers are working on bipartisan legislation to define standards for stablecoin issuance, including full reserve backing and transparent disclosures.

Ripple has positioned RLUSD to comply with these future requirements. The firm has emphasized its commitment to transparency and accountability, stating that RLUSD reserves will be audited and redeemable 1:1 with the U.S. dollar.

Stablecoins have drawn increasing attention from both regulators and major institutions. In recent months, major corporations such as Amazon and Walmart have reportedly evaluated entry points into the stablecoin ecosystem, either for internal payment flows or consumer transactions. A regulated, institution-friendly stablecoin like RLUSD could appeal to such firms.

Institutional Interest and Ecosystem Growth

The RLUSD milestone also reflects Ripple’s broader ambitions to support cross-border payments, tokenized real-world assets (RWAs), and decentralized finance (DeFi) use cases. As stablecoins become the backbone of on-chain liquidity, Ripple aims to position RLUSD as a secure and compliant alternative for both retail and enterprise users.

The partnership with BNY Mellon enhances the token’s credibility in institutional circles, providing assurance that reserves are professionally managed and accessible in times of stress. This is crucial for large investors and corporations who may be cautious about stablecoins that lack clear regulatory oversight or financial safeguards.

What Comes Next for RLUSD

With RLUSD’s supply growing and regulatory discussions heating up in Washington, Ripple’s stablecoin play is entering a critical phase. The involvement of a trusted custodian like BNY Mellon helps the token stand out in a competitive market. Meanwhile, the pending trust bank charter could significantly enhance Ripple’s ability to scale RLUSD as a compliant, regulated financial product.

Whether RLUSD can challenge the dominance of legacy stablecoins remains to be seen, but with over half a billion dollars in circulation, Ripple is clearly making progress. As the company continues to integrate RLUSD into its payment and liquidity products, partnerships like the one with BNY Mellon could be key to building long-term trust.