Circle, the company behind the creation of the USD Coin (USDC) stablecoin, announced a custody collaboration with New York Community Bancorp (NYCB) on June 28 in a press release. Following this deal, New York Community Bank will also become a trustee for the USDC stablecoin. Now the two companies will collaborate to create strategies that will use Circle blockchain technology as well as stablecoin solutions to provide support for low financial solutions for underprivileged and unbanked groups.
The two organizations will also support Minority-owned Depository Institutions (MDIs). MDI will be helpful in storing extra reserves. Circle has chosen New York Community Bank to become the first financial institution to act as a custodian for USDC funds. It will distribute USDC reserves in major US financial institutions.
Circle Impact plans
The initiative is part of Circle Impact, a financial inclusion effort. It intends to provide a portion of USDC dollar-denominated reserves to minority-owned depository institutions (MDI) and community banks throughout the United States. The concept, initially unveiled as a major pillar of Circle Impact in November 2021, intends to achieve billions of dollars in savings over time throughout the footprint of underused financial institutions.
How the deal will help USDC, Circle and New York Community Bancorp
The USDC stablecoin was created to give the people better access to cryptocurrency. The present deal will help in achieving billions of dollars in deposits across under-represented financial institutions over time. It will also help in connecting community banks and MDIs in the booming digital assets market. The custodial collaboration would help in increasing USDT acceptability in the United States because community banks have a significant network in the country.
Circle’s chief strategy officer, Dante Disparte, said:
“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.”
Leading US financial institutions, like BlackRock and the Bank of New York Mellon, have USDC reserves. The surge in redemptions, as well as the decline in Tether’s (USDT) market value to 66 billion, prompted crypto investors to lose faith in the leading stablecoin. Due to the crisis over Tether reserves, hedge funds have dumped USDT holdings.
 stablecoin, announced a custody collaboration with New York Community Bancorp (NYCB) on June 28 in a press release.){kind=link}