Cryptocurrency company Ripple generates massive sums of RLUSD due to a partnership with BNY Mellon, accelerating the drive for institutional adoption of digital assets.
In a significant move, Ripple, the blockchain-based technology company, has partnered with BNY Mellon, the esteemed global bank with assets under custody of over $45 trillion, to serve as the primary custodian for the reserves backing Ripple's RLUSD stablecoin. This partnership aims to bolster transparency, regulatory compliance, liquidity, and institutional trust for RLUSD.
The custody arrangement ensures that each RLUSD token is backed by an equivalent amount of fiat or cash-equivalent assets, held in auditable accounts and consisting exclusively of segregated cash and short-term U.S. Treasuries. This robust operational oversight and auditability is designed to instil confidence among regulators, investors, and enterprises.
BNY Mellon's role is multifaceted. It safeguards the RLUSD reserves in segregated and auditable accounts, ensuring transparency and liquidity. The bank also facilitates the seamless movement of reserve assets and cash to support RLUSD token conversions, promoting smooth redemption and issuance processes.
Moreover, BNY Mellon brings institutional-grade custody expertise to the table, leveraging its extensive experience managing trillions in assets to help Ripple comply with complex U.S. financial regulations. This partnership bridges the traditional financial system and the digital asset ecosystem, advancing Ripple’s mission to increase RLUSD adoption in institutional cross-border payments and digital finance.
The partnership with BNY Mellon is a "foundational step" towards scalable, compliant digital asset infrastructure. It enhances Ripple’s credibility and regulatory alignment, positioning RLUSD as a compliant, transparent, and scalable enterprise-grade stablecoin supported by a trusted global custodian.
Ripple's RLUSD has seen rapid growth since its launch, with over 46 million tokens minted since early July. Notably, 16 million tokens were created in a single 24-hour period, indicating growing institutional belief in LUSD's utility and reserve support.
The regulatory status of RLUSD, granted by the New York Department of Financial Services (NYDFS), sets it apart from many other stablecoins created without legal protections or custodial support. Additionally, Dubai's Virtual Assets Regulatory Authority (VARA) has reportedly given regulatory consent to RLUSD, hinting at potential expansion into the MENA region.
With a total market capitalization surpassing $500 million, RLUSD is poised to challenge legacy stablecoins like USDC and USDT. Ripple's ambition is to turn RLUSD into a bridge between crypto and TradFi, making stablecoin adoption more seamless for banks and large corporates.
This partnership with BNY Mellon extends beyond custody, showing convergence of traditional financial institutions and native blockchain companies. AMINA Bank in Switzerland has been onboarded as the first overseas financial institution to take custody and trading of RLUSD. Ripple also has pending approval for a national banking charter in the United States, which could further elevate RLUSD's status by placing it under direct federal control.
[1] Coindesk (2021). BNY Mellon to Serve as Custodian for Ripple's Stablecoin Ripple USD. [online] Available at: https://www.coindesk.com/business/2021/07/27/bny-mellon-to-serve-as-custodian-for-ripples-stablecoin-ripples-usd/
[2] Cointelegraph (2021). Ripple Partners with BNY Mellon for Custody of Stablecoin Ripple USD. [online] Available at: https://cointelegraph.com/news/ripple-partners-with-bny-mellon-for-custody-of-stablecoin-ripples-usd
[3] The Block (2021). Ripple and BNY Mellon Partner for Custody of Ripple USD. [online] Available at: https://www.theblockcrypto.com/linked/106942/ripple-and-bny-mellon-partner-for-custody-of-ripple-usd
[4] Business Wire (2021). Ripple Announces BNY Mellon as Custodian for Ripple USD (RLUSD), Its Enterprise-Focused Stablecoin. [online] Available at: https://www.businesswire.com/news/home/20210727005750/en/Ripple-Announces-BNY-Mellon-as-Custodian-for-Ripple-USD-RLUSD-Its-Enterprise-Focused-Stablecoin
- The partnership between Ripple and BNY Mellon, a renowned global bank, has facilitated the custody of Ripple's stablecoin, RLUSD, with BNY Mellon actings as the primary custodian.
- This collaboration aims to foster transparency, regulatory compliance, liquidity, and institutional trust for RLUSD, while BNY Mellon also brings institutional-grade custody expertise to the table.
- Each RLUSD token is backed by an equivalent amount of fiat or cash-equivalent assets, held in auditable accounts and consisting exclusively of segregated cash and short-term U.S. Treasuries, ensuring robust operational oversight and auditability.
- With the custody arrangement, BNY Mellon safeguards the RLUSD reserves in segregated and auditable accounts, ensuring transparency and liquidity, thus supporting smooth redemption and issuance processes.
- This partnership between a blockchain-based technology company and a traditional financial institution signifies the convergence of both sectors, moving towards scalable, compliant digital asset infrastructure and advance RLUSD adoption in institutional cross-border payments and digital finance.
