Citizens Trust Bank, a bank governed by the Federal Deposit Insurance Corporation (FDIC), has partnered with Circle Internet Finance to keep some of its reserves in Dollar Coin in order to promote financial inclusion and digital literacy in the greater Atlanta area.
On February 24, Circle announced that Atlanta-based Citizens Trust Bank would hold $65 million in USDC reserves as part of a bigger cooperation between the two companies. The bank's USDC reserves, which will also be used for other financial inclusion initiatives, will give small businesses access to capital. Holding USDC, president and CEO of Citizens Trust, will improve the bank's balance sheet.
The majority of Citizens Trust Bank's voting shares or board of directors are people of color, according to the FDIC's designation of the bank as a minority-owned depository institution (MDI). In 1947, the bank enrolled in the Federal Reserve System.
The bank increased its deposits by $220 million between 2020 and 2021. The most recent year for which data is publicly available is 2021, and during that year citizens offered mortgage loans for homes, businesses, and consumers totaling $157 million.
Not all American financial institutions, including Citizens Trust, maintain USDC reserves. Moreover, the Bank of New York Mellon, Consumers Bank, New York Community Bank, Silvergate Bank, Silicon Valley Bank, and Signature Bank also have USDC holdings on their balance sheets.
Along with the decentralized financial boom of the past two years, stablecoin settlements have gained in popularity as more users rely on dollar-pegged assets to preserve collateral, trade cryptocurrencies, and create yield. The usage of stablecoins for payments is still quite modest as a result of legislative limitations.