Circle, the issuer of USD Coin stablecoin, on Tuesday said it entered a custody partnership with New York Community Bancorp. Under the agreement, New York Community Bank will become a custodian for USDC stablecoin.
The move is part of Circle Impact, an initiative to improve financial inclusion. It aims at distributing a share of USDC dollar-denominated reserves to Minority-owned Depository Institutions and community banks across the U.S..
Circle Approves New York Community Bank as USDT Custodian
Circle, in a press release, on June 28 revealed signing a partnership with New York Community Bancorp (NYCB) which makes its subsidiary New York Community Bank to become a custodian for USDC reserves. It will further diversify USDC reserves in the leading U.S. financial institutions.
Furthermore, Circle and NYCB will collaborate on new strategies to promote access to low-cost financial solutions. They will cater to underserved and unbanked communities by using Circle blockchain and stablecoin solutions.
USDC stablecoin was made to provide the general public with improved access to crypto. The latest step will help it reach billions of dollars in deposits over time across underrepresented financial institutions.
Dante Disparte, chief strategy officer of Circle, believes the partnership will help connect community banks and MDIs to the growing digital assets market. He said:
“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.”
Andrew Kaplan, executive vice president at NYCB, thinks the custody partnership will help foster USDT acceptance in the U.S. as community banks have a large network in the country.
USDC reserves are kept in the custody of leading U.S. financial institutions, including BlackRock and Bank of New York Mellon. This is the first time a community bank will serve as a custodian.
USDC Market Cap Continues Rising Amid Tether Issues
The increase in redemptions and fall in Tether’s (USDT) market cap to 66 billion caused crypto investors to lose trust in the top stablecoin. Hedge funds have sold USDT holdings due to doubts over Tether reserves.
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