Circle Applies For US Trust Bank Charter To Manage Its USDC Reserve

Authored by Stephen Katte via CoinTelegraph.com,

Stablecoin issuer Circle has applied to establish a national trust bank in the United States that, among other duties, would oversee the firm’s USDC reserve on behalf of its US issuer. 

If the application is approved by the US Office of the Comptroller of the Currency (OCC), Circle’s First National Digital Currency Bank would be authorized to operate as a federally regulated trust institution, Circle said in a statement on Monday.

Circles Digital Bank also hopes to strengthen the infrastructure that “supports the issuance and circulation” of USDC and offer digital asset custody services to institutional customers, the stablecoin issuer added. 

Source: Jeremy Allaire

National Trust Banks can’t accept cash deposits or issue loans. However, they can offer custodial services and operate nationally under the oversight of the OCC, rather than having to apply for individual state-based money transmitter licenses or specific digital currency licenses, according to law firm Dave Wright Tremaine. 

GENIUS Act compliance 

Circle said a federally regulated trust charter would also help it meet requirements under the proposed GENIUS Act, which passed the US Senate on June 17 and moved to the House of Representatives, where it will face another vote before possibly becoming law. 

Circle co-founder and CEO Jeremy Allaire said Circle is taking “proactive steps to further strengthen our USDC infrastructure” and “align with emerging US regulation for the issuance and operation of dollar-denominated payment stablecoins.” 

National Trust Bank applications to the OCC are subject to a 30-day comment period, and the regulator usually decides to approve or reject within 120 days after receipt of a complete application. 

Other crypto firms also eye bank charters

Circle isn’t the only crypto firm hoping to create a national trust bank under the oversight of the OCC. 

Eleanor Terrett, the host of the Crypto in America podcast, said in an X post on Monday that there are several other crypto firms, including the digital currency wing of financial services giant Fidelity, that are applying for a national bank charter license from the OCC.

Circle has been considering a bank charter since at least 2022 and was also named in The Wall Street Journal report on April 21 as one of several crypto firms considering applying for a bank charter or license.

Anchorage Trust Company became the first crypto firm to receive a license from the OCC in January 2021, converting into Anchorage Digital Bank. 

Circles’ stock trades flat

Circle Internet Group (CRCL) shares have traded flat in the last trading session, rising 0.48% to $181, Google Finance data shows. In after-hours trading, the stock dropped 1.30% to $178. 

Circle’s share price was flat during the last trading session. 

After going public, Circle stock made a strong entry into the market on June 5, climbing 167% during its first trading session on the New York Stock Exchange.