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.