Circle Seeks National Trust Bank Charter
Circle Aims for National Trust Bank Charter
Circle, the leading provider of the USDC stablecoin, has applied for a national trust bank charter with the US Office of the Comptroller of the Currency (OCC). This strategic move will significantly bolster Circle's capacity to manage USDC reserves and provide secure custody solutions for digital assets.
Key Developments
- Circle's application aims to establish "First National Digital Currency Bank, N.A."
- The bank will focus on custody of USDC reserves and institutional digital asset custody, excluding cash deposits and lending.
- This expansion comes as Congress advances stablecoin legislation, expected to be signed into law, mandating liquid asset backing and monthly reserve transparency for stablecoins.
- Circle's post-IPO valuation has surged to approximately $44 billion, a significant increase from its initial $6 billion market cap.
Currently, BlackRock and BNY Mellon handle USDC reserve management and custody. While the new trust bank will assume primary responsibility, Circle plans to maintain relationships with these major financial institutions for a portion of its holdings. Circle's CEO, Jeremy Allaire, emphasized that the bank's focus will be on tokenized stocks and bonds, rather than cryptocurrencies like Bitcoin or Ether.
“Establishing a national digital currency trust bank marks a significant milestone in building a transparent, efficient, and accessible internet financial system,” stated Circle Co-Founder, Chairman, and CEO Jeremy Allaire.
The positive reception of Circle's IPO is reflected in bullish ratings and price targets exceeding $200 from several brokerages including Barclays, Bernstein, and Canaccord. However, JPMorgan and Goldman Sachs have expressed reservations regarding the company's post-IPO valuation.
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