- Circle CEO says trust bank plan strengthens USDC trust and compliance standards.
- Circle applies for national trust bank to self-custody USDC reserves safely.
- Circle aims to meet GENIUS Act rules with new trust bank.
Stablecoin issuer Circle has taken another big step in its growth journey. The company has officially applied to the U.S. Office of the Comptroller of the Currency (OCC) to launch its own national trust bank. If approved, the new company will be named First National Digital Currency Bank, N.A. In this bank, Circle would have an opportunity to self-custody its USDC reserves as well as provide big institutions with digital asset custody services. It will however not offer conventional banking services such as taking deposits or allocating loans.
USDC Issuer Circle Aims to Meet GENIUS Act Rules with New Bank
Jeremy Allaire, the CEO of Circle, gave the reasons the move is important. As he spoke to Reuters, he added that Circle has been keen on pursuing the greatest levels of trust and transparency, governance, and compliance. That is a continuation of becoming a national trust company.” This indicates that Circle hopes to develop confidence and adhere to very strict policies as it expands.
The other company with a national trust bank charter was Anchorage Digital. Selecting to be the second will allow Circle to stand out in the crypto world.
A favorite stablecoin is USDC, issued by Circle, which has a fixed ratio of one U.S. dollar. Stablecoins such as USDC are frequently used by traders to transition money swiftly between cryptocurrencies. This saves them the volatility that is synonymous to Bitcoin and other coins. In the past couple of years, the stablecoins have been used at a rapid pace. Most analysts are convinced that they are able to facilitate the sending of money within seconds anywhere in the world.
If Circle’s application is approved, it would not just help Circle. It would also assist the U.S. financial to adjust to digital money. As an example, the introduced GENIUS Act would invite new stablecoin rules. The presence of a national trust bank would assist Circle to meet these requirements with ease. Such action would demonstrate that the traditional banking system can also accommodate digital dollars without any issues.
Circle Seeks OCC Nod to Self-Custody USDC Reserves
Jeremy Allaire said that this plan is a big step toward building a fair and open financial system. Circle is taking proactive measures to further harden our USDC infrastructure by applying to receive a national trust charter and receive a national trust charter, he added. In his opinion, USDC is less reliable as it should be regulated by more powerful rules and clear control. Subsequently, this might enhance the position of the U.S dollar as a currency in the international economy.
This is the news just after Circle made its official debut on the stock market on June 5. The company was listed in the stock market and its stock value tripled in one day. This propelled its market value to above 18 billion dollars. The fact that Circle is publicly traded also implies that the company has to be more compliant with stricter regulations. This will comprise consistent financial audits, transparent financial statements and strained governance.
Circle is also going global. In April, it received In-Principle Approval in Abu Dhabi to operate as a money services business. It was also licensed in Europe under their new Markets in Crypto-Assets (MiCA) regulations in July 2024.
If the OCC approves the new charter, Circle may qualify to hold its own USDC reserves, rather than storing them with other banks, such as BNY Mellon. It might also hodl crypto assets, such as tokenized stock and bonds, by big clients. This would make Circle gain more control and expand its services safely.
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