The partnership should enhance regulatory compliance for Ripple, the issuer of ripple USD (RLUSD), and boost institutional credibility for the company as well as the fast-growing stablecoin industry.

The move follows Ripple's application for a national banking license and a Federal Reserve master account to further integrate with the U.S. financial system.

BNY will custody the reserves of Ripple’s new stablecoin, Ripple USD, the firms said Tuesday. Through this partnership, the country’s oldest bank and one of the nation’s oldest cryptocurrency firms say they aim to bolster institutional adoption of digital assets and bridge the gap between the traditional finance and crypto realms.