New York Community Bank holds collateral for Circle's USDC The Ecoinomic

New York Community Bank partners with Circle

Circle, the USDC issuer, said on Tuesday: "New York Community Bank, a New York State-based community bank with branches in New Jersey, Florida and Ohio, will act as custodians for some of the reserve assets behind the USD stablecoin (USDC),

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

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

The competition of stablecoins

USDC has differentiated itself from other stablecoin rivals by establishing closer ties with traditional banks and is said to be more cautious in choosing reserves, holding only cash in U.S. dollars and short-term U.S. government bonds. It is the second largest stablecoin after Tether's USDT with a Circulating Supply of $55 billion. It has taken market share from USDT since the terra blockchain was born.

Earlier this spring, Circle announced that BNY Mellon, one of the oldest and largest supervisory banks in the United States, would be the primary supervisor for USDC reserves.

NYCB is a relatively small bank, managing $61 billion in assets. By comparison, BNY Mellon's assets are under management amounting to $45 trillion.

However, in the long run, Circle said it aims to transfer "billions of dollars in deposits over time" to unrepresented financial institutions.

"By partnering with NYCB, we are opening up new avenues for community banks and MDIs across the country to become key participants in the rapidly growing digital asset market," said Dante Disparte, Circle's chief strategy officer and head of global policy. Said in the statement.