USDC Issuer Circle Launches First Custody Relationship With A Community Bank
- Circle is partnering with New York Community bank, Bancorp to custody USDC reserves.
On Tuesday, global financial technology company and USDC issuers, Circle internet financial, announced a custody collaboration with the New York Community Bancorp Inc. (NYSE: NYCB).
Part of the deal’s terms is for the New York Community Bank to be in the custody of Circle’s USDC reserves. The New York Community Bank is one of the subsidiaries of the New York Community Bancorp Inc.
“If we want to make the future of money and payments more inclusive than the past, we have to build new partnerships and connections at the community level,” said Dante Disparte, Chief Strategy officer and Head of Global Policy for Circle. “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.”
Circle on USDC Future
Reportedly, NYCB will leverage Circle’s stablecoin and blockchain solutions for the unbanked and underserved communities to access low-priced financial solutions. Additionally, the two firms will collaborate to develop a system to hold additional reserves for Minority Depository Institutions (MDIs). This plan would be of immense support for these MDIs.
It is the first time Circle will partner with a community bank for custody of its USDC reserves. The effort is one of the ways Circle intends to distribute shares of USDC USD pegged reserves to various community banks and MDIs in the US. Last November, Circle announced that this move is one way it intends to impact the underbanked communities positively.
Also, it represents the firm’s long-term plan to own billion-dollar deposits across multiple underrepresented financial institutions with time.
In his submission, the vice president of the NYCB, Andrew Kaplan, noted that the partnership makes NYCB a leader in crypto innovation among American banks. He added that NYCB is happy to achieve two important objectives with Circle. First, they are a custodian of USDC reserves.
Also, they would be involved in valuable programs that affect the onboarding of New York communities and customers through proper education about digital assets. Circle and the NYCB will likely develop more initiatives for the broader New York communities in the future.
However, that would depend on the success or outcome of this first partnership effort. Many businesses have been using Circle’s USDC for commerce, payments, and financial applications globally.
The NYCB has 347 branches with eight local divisions – a reflection of its astounding growth. As of March 31, 2022, NYCB’s stockholders’ equity stands at $6.9 billion, and has reported assets worth $61 billion. Also, it has $46.8 billion and $38 billion in loans and deposits, respectively.