Circle CEO Jeremy Allaire said the company would seek to achieve this goal with the help of leading US financial regulators.
The US digital payments company Circle, behind the stablecoin USD Coin (USDC), has announced that it plans to apply for registration as a federally chartered national bank.
Jeremy Allaire, the founder and CEO of the firm, revealed these plans via an announcement on a blog posted on Monday.
According to him, by becoming a full-fledged commercial bank, Circle’s business would be placed under the supervision of major financial and market regulators in the United States, including the Federal Reserve, the U.S. Treasury, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC).
The growth of USDC is at the origin of the bank’s project
Circle created USDC in May 2018, and in just over three years, stablecoin has become the second largest in the digital currency industry behind Tether (USDT). Stablecoin is now worth more than $ 27.5 billion in market capitalization, according to data from market aggregator CoinGecko.
Circle, backed by Goldman Sachs, wants USDC to be more adopted in the next few years, with its increased use making it an essential cog in financial services and e-commerce applications.
According to Allaire, the decision to apply for a federal banking charter is therefore based on Circle’s pursuit of its “ long-standing commitment to trust, transparency and accountability ».
« We believe that full reserve banking, based on digital currency technology, can lead to a financial system that is not only radically more efficient, but also safer and more resilient “, he added.
Through this initiative, the issuance (and circulation) of USDCS will be within the strict regulatory guidelines that govern the transfer of funds in the United States.
Obtaining a full reserve bank charter means that Circle will have to hold a reserve of all deposits. These will be kept in cash and cash equivalents to allow instant withdrawal if a depositor expresses the need.
The announcement of Circle’s intention to become a commercial bank follows an earlier agreement with Concord Acquisition Corp that should allow Circle to trade on the New York Stock Exchange (NYSE). The company filed a Form S – 4 with the SEC last week.