BNY and State Street released earnings earlier this week, and both custodial banks discussed money markets, stablecoins and tokenized money markets. BNY says in their Q2 2025 Earnings about "Digital Assets and Stablecoin Developments," "The company was selected as reserve custodian for Societe Generale's first USD stablecoin in Europe in June 2025, and as primary custodian for Ripple's US stablecoin reserves (as announced in July 2025).... Today, BNY is a leader in servicing the growing stablecoin market, enabling companies to create and use stablecoins by providing wide-ranging services from issuance to ongoing operations. Our advancements in the digital assets ecosystem are just one example of continual innovation, but there are many others."
President & CEO Robin Vince comments during the earnings call Q&A, "Look, net, we see these advancements providing more opportunities than risks, but ... there are things on both sides of the ledger. If you just go back and just think about industries and big changes in technology that happen over time, they create disruption. And what disruption does is it allows for a little bit of a reorganization sometimes of the ecosystem. And it's our observation that companies that have a lot of forward-thinking innovation that push forward take advantage of that as opposed to sticking their heads in the sand, tend to be winners."
He says, "Now we have many specific valuable attributes that help us make us a great partner to these digital assets firms. And that's one of the reasons why we've been so engaged in the space for several years because initially, it had been about providing our traditional banking services to those digital asset companies. We serve many of them with our traditional banking services. Then it's been about helping with the on ramps, off ramps between that traditional banking world and the on-chain world, and in the future, we think it's also going to be about more activity on-chain. We are live with Bitcoin custody today."
Vince continues, "We do it natively, and we can help clients.... We're in the business of looking after stuff as one of our businesses, and we're happy to do that. But we're also in the payments business. Again, there's synergy between our platforms. We're also in the issuer services corporate trustee business. They're synergy. We're in the NAV business. That's relevant. Synergy. Distribution business, relevant. Money market fund business, relevant. And so when you take all of these things together, we're a terrific partner for some of these clients because we can do a lot of different things with a trusted brand that actually helps them to feel to feel good."
He adds, "So, look, [with] stablecoins particularly, it's obviously one of the topics of the day, and we're very active in that space. And that's the reason why we mentioned a couple of those recent examples, but there are many more in our prepared remarks."
Last week, a press release titled, "Ripple Selects BNY to Custody Ripple USD Reserves," explains, "Ripple, the leading provider of digital asset infrastructure for financial institutions, announced it has selected The Bank of New York Mellon Corporation ('BNY') (BK), a global financial services company, for the primary custody of Ripple USD (RLUSD) reserves. Ripple and BNY are jointly committed to paving the way for digital asset adoption at institutional scale and together are bridging the gap between the traditional finance and crypto ecosystems."
It states, "Ripple USD is a trusted, enterprise-grade stablecoin, designed with regulatory compliance, utility, and transparency at its core.... Unlike stablecoins geared primarily toward retail users, RLUSD has been purpose-built for enterprise utility, particularly in improving the speed, cost and efficiency of cross-border payments. BNY will serve as the primary reserve custodian of RLUSD, leveraging its deep technology stack and expertise enabling the digital assets ecosystem.... This builds upon BNY’s proven track record of providing end-to-end services across stablecoin infrastructure and furthers BNY’s efforts for future interoperability between stablecoins and traditional assets."
In other earnings news, State Street CEO Ron O'Hanley comments on the company's Q2 2025 Earnings Call, "So we think about it in 2 ways. One, as a bank ourselves, but maybe more importantly, as an important servicer to other asset managers, we do see tokenization has been slower than I think anybody anticipated if you go back 3, 4 years. But I think with the current administration and the regulatory frameworks really in most parts of the world starting to emerge, we think that the pace on that will continue to accelerate."
He explains, "The opportunities for tokenization are really broad. I mean -- it's not just the tokenization deposits, [but] tokenization of money market funds enables uses of ... these kinds of assets in a different way than originally anticipated. It could be, in some cases, used for collateral better than it could be in other cases, for example."
He adds, "So we think this will -- as regulatory frameworks are developed -- accelerate. I think the questions that the regulators, particularly the bank regulators, need to deal with [in] all of these things is -- how do they think about core deposits? And how do they think about banks as the transmitters of monetary policy. And to the extent to which any of this causes more deposits to leave the banking system, I mean, remember, money market funds seemed like a passing fad 4 years ago, and now $6 trillion is out of the banking system."
Finally, Charles Schwab also released Q@'25 earnings and hosted its 2025 Summer Business Update on Friday. CFO Mike Verdeschi tells us, "We delivered record financial results during the second quarter.... Transactional cash levels continue to reflect normal cash behaviors, inclusive of organic growth, typical 2Q tax seasonality and client engagement, albeit with an investor sentiment remaining somewhat cautious. At the same time, we made further progress in reducing higher cost funding at the banks, bringing the level down to approximately $28 billion."
He says, "Bank deposit account fees moved higher due to an improved net yield as a growing percentage of the balances continue to convert to the floating rate bucket.... And as anticipated, we saw seasonal tax-related outflows in client transactional sweep cash during April and after another slight reduction in May, transactional sweep cash built during the month of June bringing the quarter-over-quarter increase to approximately $4.3 billion. With a continuation of normal client cash trends, we were able to utilize a combination of cash flows coming off of the securities portfolio as well as excess cash on hand to further reduce high-cost funding at the banks."
Finally, Verdeschi adds, "Looking ahead, we believe trends will continue to reflect normal client activity, and we plan to keep a close eye in a range of macro factors as shift in market sentiment tend to influence client cash allocations. As I've noted previously, we are focused on maintaining flexibility in managing the balance sheet in a manner that keeps us well positioned to negate a wide range of potential environments."
