New York Community Bank to Serve as Custodian for USDC Stablecoin Reserves, Circle Announces Partnership

Circle and NYCB banners

Circle, the issuer of the USD coin (USDC) stablecoin, has announced a strategic partnership with New York Community Bank (NYCB), a community bank with branches across several states. The collaboration aims to leverage NYCB’s custodial services and work on developing low-cost financial solutions for underserved communities.

The Partnership

Circle, the issuer of the USD coin (USDC) stablecoin, has announced a strategic partnership with New York Community Bank (NYCB), a community bank with branches across several states. The collaboration aims to leverage NYCB’s custodial services and work on developing low-cost financial solutions for underserved communities.

According to Circle’s chief strategy officer, Dante Disparte, the partnership with NYCB signifies a commitment to inclusivity in the digital asset market. He stated, “By partnering with NYCB, we are opening up new pathways for community banks and MDIs across the country to be key participants in the fast-growing digital assets market.”

Collaborating with TradFi

The partnership reflects Circle’s strategy of collaborating with traditional financial institutions to enhance the stability and transparency of USDC. Circle has differentiated USDC from other stablecoins by prioritizing ties with established banks and adopting a conservative approach to reserve selection. USDC reserves consist solely of U.S. dollar-denominated cash and short-term U.S. government bonds, distinguishing it as a trusted stablecoin in the market.

After the bankrupt Silicon Valley Bank (SVB), looks like New York Community Bank (NYCB), which just got restructured, had USDC asset exposure. Politicians, media and institutions thought stablecoins were a risk to banks but history indicates that banks are a risk to stablecoins. pic.twitter.com/UGcp43tIuS

— Gabor Gurbacs (@gaborgurbacs) March 9, 2024

The announcement comes amidst USDC’s rise in popularity, solidifying its position as the second-largest stablecoin after Tether’s USDT, with a circulating supply of $55 billion. Circle’s emphasis on partnering with reputable custodian banks like BNY Mellon and now NYCB underscores its commitment to transparency and regulatory compliance.

Driving Financial Inclusivity

Furthermore, Circle’s decision to include minority-owned depository institutions in its reserve allocation aligns with its efforts to promote financial inclusion and support underrepresented communities in the digital economy.

In a statement, Circle highlighted NYCB’s role in providing custodial services for USDC reserves, positioning it as a crucial partner in facilitating the growth of digital assets within the banking sector. The collaboration with NYCB marks another milestone in Circle’s mission to bridge traditional finance with the emerging digital asset landscape.

Author: Candace

Candace loves the arts. She holds some bitcoins.