Citizens Trust Bank, a financial institution regulated by the Federal Deposit Insurance Corporation (FDIC), has partnered with Circle Internet Financial to hold some of its reserves in USD Coin (USDC) — a move the companies said would promote financial inclusion and digital literacy in the Atlanta area.
On February 24 Circle he announced Atlanta-based Citizens Trust Bank would hold $65 million in USDC reserves as part of a broader collaboration between the two companies. The bank’s USDC reserves will give small businesses access to capital and will be used for other financial inclusion initiatives. Citizens Trust President and CEO Cynthia N. Day said holding USDC would also improve the bank’s balance sheet.
Citizens Trust Bank is classified by the FDIC as a Minority-Owned Depository Institution (MDI), meaning that a majority of its voting stock or board of directors are minority individuals. The bank joined the Federal Reserve System in 1947.
Flask increased its deposits by $220 million in 2020 and 2021. In 2021, the most recent year for which information is publicly available, Citizens financed $157 million in commercial, consumer and residential mortgage loans.
Related: Breaking: Circle refutes rumors of planned SEC enforcement action
Citizens Trust is not the only US financial institution that holds USDC reserves. As reported by Cointelegraph, Bank of New York Mellon, Customers Bank, New York Community Bank, Silvergate Bank, Silicon Valley Bank and Signature Bank also to hold USDC on its balance sheet.
1/ Last year stablecoins settled on chain >7 tn. The current operating rate is ~9 tn/year. This is significantly more than Mastercard (~2.2tn), Amex (~$1tn) and Discover (pic.twitter.com/DMG9NpDW8t
— Peter Johnson (@TheChicagoVC) December 21, 2022
Stablecoin settlements have grown in line with the decentralized finance boom of the past two years, with more users relying on dollar-linked assets to hold collateral, trade cryptocurrencies and earn income. However, the use of stablecoins for payments remains minimal due to regulatory barriers.