Circle soon seeks US banking charter to bolster stablecoin business
The Stablecoin Circle issuer is in talks with US regulators to become the fourth crypto-native company to obtain a federal trust charter through the Office of the Comptroller of the Currency (OCC).
Circle CEO Jeremy Allaire told Bloomberg that the Boston-based fintech is “making good progress” in obtaining a banking charter. If approved, it would make Circle a federally regulated entity offering custodial, stablecoin management, payment, exchange, and other services.
“They’ve done a lot of work to lay the groundwork for how they’re going to oversee crypto, how they’re going to oversee stablecoin issuers specifically,” Allaire added.
The blockchain company has signaled its desire to get the green light from the OCC in August 2021. Since then, it has 18 months to execute its business plan and show the OCC that it can operate safely. security. At the end of this period, the regulator will assess Circle’s operations and determine whether it will sign a final charter.
With the approval, Circle would join Anchorage, Paxos Trust and Protego Trust which have received preliminary approvals to become the only national trusts born into the crypto ecosystem. In particular, the endorsement indicates that the OCC was comfortable with these companies as custodians, which is important for a hack-prone industry.
Circle has raised nearly $1 billion
Kraken and Avanti also secured approval from the Wyoming state regulator to launch a crypto bank under an SPDI charter. A special purpose depository institution charter allows its holder to operate an independent bank, which reduces reliance on third-party financial institutions and enables it to provide depository, custodial and trust services for digital assets.
Circle expects to serve as a compliant bridge to the US dollar payment system and its USDC stablecoin. However, it will be required to comply with all federal and state laws, including “know your customer”, anti-money laundering and related regulations. It will also be compliant with SPDI and digital asset laws, which include requirements that escrows must be 100% reserved and meet consumer protection standards.
Circle made headlines this week raising $400 million in new funds, led by BlackRock, the world’s largest asset manager with nearly $8 trillion in assets under management. This round, plus the $440 million raised in 2021 and a $110 million Series E the stablecoin issuer raised in 2018, brings its total funding to nearly $1 billion.
In addition to its investment and role as the primary asset manager of USDC’s cash reserves, BlackRock has partnered with Circle to explore capital market applications for its stablecoin.