New York Community Bank to Hold Assets Backing Circle's USDC

This marks the first time a community bank will serve as a custodian for a stablecoin.

AccessTimeIconJun 28, 2022 at 5:19 p.m. UTC
Updated May 11, 2023 at 5:38 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

New York Community Bank, a New York state-based community bank that also has branches in New Jersey, Florida and Ohio, will serve as a custodian for some of the reserve assets behind the USD coin (USDC) stablecoin, Circle, USDC's issuer, said Tuesday.

The two companies will also work on "low-cost financial solutions for underserved and unbanked communities," according to a statement.

The partnership is part of Circle's push to include underrepresented financial institutions in the digital asset market and allocate a share of its reserves in minority-owned depository institutions.

USDC has distinguished itself from stablecoin competitors by forging closer ties with traditional banks and reportedly being more conservative in the selection of reserves, holding only U.S. dollar-denominated cash and short-term U.S. government bonds. It's the second-largest stablecoin after Tether's USDT with a circulating supply of $55 billion. It has taken market share from USDT since the implosion of the Terra blockchain.

Earlier this spring, Circle announced that BNY Mellon, one of the oldest and largest custodian banks in the U.S., would be the primary custodian for USDC reserves.

NYCB is a relatively small bank, managing $61 billion in assets, according to its website. By comparison, BNY Mellon's assets under custody amounts to $45 trillion.

In the long term, though, Circle says it aims to move "billions of dollars in deposits over time" to underrepresented financial institutions.

“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," Dante Disparte, Circle's chief strategy officer and head of global policy, said in the statement, referring to minority depositary institutions.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.