Cryptocurrency News

New York Community Bank Will Custody Circle’s USDC Reserves

By June 30, 2022 No Comments
Circle's USD Coin (USDC) stablecoin cover

Key takeaways:

  • Fintech company Circle has announced New York Community Bank (NYCB) as a custodian of its USDC stablecoin
  • Going forward, Circle plans to expand the roster of USDC custodians with more community banks and MDIs as a part of the Circle Impact initiative
  • USDC is currently the largest stablecoin in the sector, boasting a market capitalization of $55.8 billion

USDC issuer Circle enters a custody partnership with New York Community Bank 

Circle, the issuer of the second largest market cap stablecoin USD Coin (USDC), announced on Tuesday that it is partnering with New York Community Bancorp (NYCB). As a part of the deal, the New York-headquartered financial firm will become a custodian of USDC cash reserves and collaborate with Circle to promote low-cost payments services for “unbanked communities”.

According to a press release, NYCB has become the first community bank to manage stablecoin reserves. Circle plans to expand custody over USDC to more traditional financial institutions in the future, as a part of the Circle Impact initiative announced last November.

This is not the first time that Circle has forged a high-profile partnership with a traditional financial institution. Recall that in April, the company selected BNY Mellon – one of the oldest the largest custodian banks, with more than $45 trillion in assets under custody (AUC) – as a primary custodian for USDC reserves. 

The USDC stablecoin has seen immense growth in the past year. In January, it surpassed its biggest rival, Tether (USDT), to become the largest stable digital currency on Ethereum in terms of the total supply. Despite the recent crypto downturn and a highly publicized collapse of Terra’s UST stablecoin, USDC has managed to retain the $50B+ market cap the coin first reached in February.