FV Bank, a licensed challenger bank and digital asset custodian, is adopting USD Coin (USDC) on its platform as a payment acceptance, processing and settlement method.
According to a press release, the service enables FV Bank account holders to instantly and automatically convert Circle’s stablecoin into USD at the moment of deposit. The crypto-friendly bank will act as a bridge between fiat bank accounts and USD Coin.
The move aligns with FV Bank’s plans to begin offering digital-asset custody services seamlessly integrated into its banking platform in the fourth quarter.
Clients have been asking for payouts in cryptocurrency, FV Bank said in the release, which the challenger bank will do by converting fiat to USDC, giving customers the ability to send funds in stablecoin with full regulatory compliance.
The bank touts other benefits including reducing the friction of domestic and international settlements as the money transfer process becomes dramatically faster. The firm believes the move will help to cut the necessary IT infrastructure as well as the capital base for outfits that want to adopt crypto-backed payments. For instance, FV Bank account holders are now able to send invoices to their international clients in USDC and receive it without worrying about wallets, conversions, fees etc.
“We couldn’t be more pleased to work with Circle and bring almost instantaneous deposits and conversion of USDC to our account holders,” said FV Bank CEO, Miles Paschini. “It was imperative for us to work with a stablecoin issuer who has an excellent track record and whose values align with our own. We look forward to growing our working relationship with Circle, as we collaboratively help bridge the traditional financial system with the world’s leading blockchains to unlock further growth in the digital asset sector.”
The news comes shortly after Circle, for the first time since its launch in 2018, has revealed a breakdown of its reserves, as well as a complete list of USDC reserve custodians.
The breakdown, dated as of June 30, 2022, shows that Circle held 100% of its $55.7 billion reserves in cash and cash equivalents. Specifically, short-term United States Treasuries formed the majority of its cash equivalents category with $42.12 billion or a 75 percent share. The company also reported $13.58 billion in cash held at regulated financial institutions in the US.
Since launching its US dollar-pegged USDC in 2018, Circle has published third-party monthly attestations to confirm that it does possess sufficient capital to back each individual token on a 1:1 basis.