Circle announced that it had partnered with New York Community Bankcorp to provide custody services. The bank will become USDC stablecoin’s custodian.
The action is a part of the Circle Impact project, which aims to increase financial inclusion. It proposes to give community banks and minority-owned depository institutions across the U.S. a portion of USDC dollar-denominated reserves.
The relationship between Circle and New York Community Bancorp (NYCB), which makes its subsidiary New York Community Bank a custodian for USDC reserves, was announced in a press release on June 28. The top U.S. financial institutions’ USDC reserves will become even more diversified as a result.
Additionally, Circle and NYCB will work together on fresh approaches to encourage access to affordable financial solutions. By utilizing Circle blockchain and stablecoin solutions, they will serve underserved and unbanked areas.
The USDC stablecoin was developed to give the general public better access to cryptocurrencies. The most recent action will aid in eventually reaching billions of dollars in deposits across financial institutions with low representation.
The agreement, in the opinion of Circle’s chief strategy officer Dante Disparte, will enable community banks and MDIs to gain access to the expanding market for digital assets. He stated:
“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.”
Since community banks have a wide network across the nation, according to Andrew Kaplan, executive vice president at NYCB, the custodial collaboration will aid in increasing USDT acceptance in the United States.
Leading U.S. financial firms, such as BlackRock and Bank of New York Mellon, are responsible for the custody of USDC reserves. A community bank will act as a custodian for the first time in this transaction.
In the meantime, the value of Circle’s USDC stablecoin is rising. The only stablecoin that displayed stability amid the cryptocurrency instability was USDC, whereas the other major stablecoins depegged after the Terra-Luna crash.