Circle taps NY Community bank as the latest partnership with a custodian for USDC reserves and this will also be the first time that a community bank is acting as custody for stablecoin reserves so let’s read more today in our altcoin news.
Circle tapped the NY Community Bank as the latest custodial provider for USDC reserves and the move only reflects the strategy of Circle to enhance partnerships with the banks across the US, all while trying to make payments more inclusive for underserved communities. Under the new agreement, new York Community Bancorp’s bank subsidiary will become the custodian for USDC reserves.
The two companies will leverage their power in their respective fields to promote access to low-cost financial solutions for underserved and unbanked communities as per the Circle statement. The news came months after the company announced that BNY Mellon will be the primary custodian for USDC. The two parties worked on building bridges between legacy and digital capital markets as well as the exploration of digital cash for purposes of settlement.
In comparison to BNY Mellon which holds up to $45 billion worth of assets in custody, the NY Community Bank is a small bank with $61 billion in assets. The plan shows Circle’s commitment to the long-term goal of allocating a share of the reserves to Minority-owned Depository Institutions and trying to reach billions of dollars in deposits over time acorss other financial institutions. Dante Disparte, as the Chief Strategy Officer saw the partnership as a critical step in extending the company’s connections to the community level:
“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’s USDC saw an increase in net inflow amid extreme volatility that dominated the market. Holding only cash and short-term US bonds with 1:1 peg to the US dollar prioritizes stability and compliance with regulators while USDC trails behind USDT as the fourth biggest crypto with a market cap of $56 billion.
As earlier reported, The Circle CEO Believes that the company is in a great financial situation and moved to quell the rumors that the company’s stablecoin is on the edge of crashing. Allaire said that he can understand why the crypto community will be paranoid at this time about USDC given the recent collapse of the crypto projects.
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