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Highlights
- Circle is seeking a charter that will allow it to serve as custody provider for its reserves.
- The move comes after its widely successful IPO with the stablecoin issuer keen on riding the regulatory wave.
- The US is inching closer to a robust playbook for stablecoin regulation.
Circle has formally applied for a banking license after its successful IPO, seeking to provide custodial services for itself and institutional clients. The US trust bank license application precedes an incoming robust stablecoin regulation as ecosystem activity heats up.
Circle Applies For Trust Bank License
According to a Reuters report, stablecoin issuer Circle is seeking the creation of a new entity to operate as a national trust bank. Per the report, the company has applied for a US trust bank license that will allow it to provide a raft of custodial services.
If granted the trust bank license by the Office of the Comptroller of the Currency (OCC), Circle will float First National Digital Currency Bank. Company CEO Jeremy Allaire says the new entity will custody a slice of Circle’s USDC reserves, but a portion will remain with leading financial institutions.
Furthermore, the license will allow Circle to offer custodial services for tokenized stocks and bonds rather than Bitcoin or Ethereum. Currently, Anchorage Digital is the only cryptocurrency-based company with a national trust bank license.
“Circle has long sought to seek the highest standards of trust, transparency, governance, and compliance,” said Allaire. “Becoming a publicly traded company is a significant part of that, becoming a national trust company is again a continuation of that.”
The move comes after the company’s IPO, with Circle stock flipping USDC in market capitalization after a meteoric rally.
A Changing Regulatory Landscape For Stablecoins
Circle’s applications come amid a push by Congress to roll out a national stablecoin regulatory framework. After passing in the Senate, the GENIUS Act has reached the House, but members are advocating for a merger with the CLARITY Act.
As the bill makes its way through the legislative process in the House, Circle is positioning itself to take advantage of the changes. Allaire says its IPO is the first step to take pole position, while the application for a trust banking license further strengthens its position.
“As a public company, and now, hopefully, if we are successful in getting approval from the OCC as a national trust, that will give us a foundation that the world’s leading institutions are going to be comfortable building on,” said Allaire.
Already, the company is reaping the benefits from its forward-thinking regulatory moves. Sam Altman’s World Chain is leaning on USDC for payments, while Shopify has integrated the stablecoin as Circle closes in on Tether’s dominance.
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