USDC issuer Circle chooses New York Community Bank as the latest Custodial provider

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Crypto-focused financial technology company Circle has announced that it has tapped the New York Community Bancorp’s bank subsidiary, New York Community Bank as its custodian for USDC reserves. The action is in line with Circle’s objective to expand collaborations with Community Banks across the United States in an effort to broaden payment accessibility to underserved areas.

According to an official statement by the company, the New York Community Bank will be its latest custodial provider for USDC reserves. With the new cooperation, the two companies will use expertise in their respective fields to promote access to “low-cost financial solutions for underserved and unbanked communities.” 

The Chief Strategy Officer (CSO) and Head of Global Policy at Circle, Dante Disparte, said that the company has to build new partnerships and connections at the community level if it wants to make the future of money more inclusive. He adds:

“By partnering with NYCB, we are opening up new pathways for community banks and MDIs across the nation to be key participants in the fast-growing digital assets market.”

Notably, in March, the stablecoin issuer tapped the Wall Street giant BNY Mellon as its major custodian for USDC. By March 31, 2022, New York Community Bank’s assets only totaled $61.0 billion, compared to BNY Mellon’s $45 trillion in assets in custody.

Circle focuses on its long-term goals

In order to “reach billions of dollars in deposits over time across the footprint of underrepresented financial institutions,” Circle is committing to a long-term aim of allocating a portion of its reserve to Minority-owned Depository Institutions (MDIs).

In April, Circle received $400 million from several big names, including BlackRock and Fidelity, as TheCoinRise reported.

While after the LUNA/UST crash, the stablecoin market has seemed a bit unstable with the involvement of regulatory bodies from around the world, Circle is holding strong. Its stablecoin USDC saw an increase in net inflows during the extremely volatile market. The company takes a conservative strategy and holds only cash and short-term U.S. government bonds as assets to back its 1:1 peg to the U.S. dollar.

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