Circle applies for US bank charter soon to bolster stablecoin venture

abdelaziz Fathi

Stablecoin issuer Circle is in discussions with US regulators to become the fourth crypto-native company to score 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” over securing a bank charter. If approved, that would make Circle a federally regulated entity offering custody services, stablecoin management, payment, exchange and other services.

“They’ve been doing a lot of work laying the groundwork for how they’re going to supervise crypto, how they’re going to supervise stablecoin issuers specifically,” Allaire added.

The blockchain firm signaled a willingness to obtain the OCC’s nod back in August 2021. Since then, it has 18 months to execute on its business plan and show the OCC that it can operate safely. At the end of that period, the regulator will evaluate Circle’s operations and determine whether it will sign off on a final charter.

With the approval, Circle would join Anchorage, Paxos Trust, and Protego Trust who received preliminary approvals to become the only national trusts that were born in the crypto ecosystem. In particular, the approval indicates that the OCC was comfortable with these firms as custodians, which is significant for an industry prone to hacks.

Circle raised nearly $1 billion

Kraken and Avanti have also secured approval from Wyoming state regulator to launch a crypto bank under an SPDI charter. A Special Purpose Depository Institution charter permits its holder to operate an independent bank, which reduces reliance on third-party financial institutions and allows it to provide deposit-taking, custody and fiduciary services for digital assets.

Circle expects to serve as a compliant bridge to the US dollar payments system and its stablecoin USDC. 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 comply with SPDI and digital asset laws, which include requirements that fiat deposits be 100% reserved and meet the consumer protection standards.

Circle made headlines this week when it raised $400 million in new funding, led by BlackRock, the world’s largest asset manager with almost $8 trillion in AUM. This round, plus the $440 million raised in 2021 and a $110 million Series E the stablecoin issuer collected in 2018, brings its total funding to nearly $1 billion.

In addition to its investment and role as a primary asset manager of USDC cash reserves, BlackRock has entered into a partnership with Circle to explore capital market applications for its stablecoin.

Read this next

Retail FX

eToro buys US rival Gatsby to expand zero-fee trading offering

Israeli social trading and multi-asset brokerage company eToro has secured the regulatory nod to acquire no-fee trading app Gatsby as it aims to expand its business in the US.

Executive Moves

Genesis Global snatches CMO Jason Jhonson from metaverse company

The hire of Jhonson follows the announcement that Genesis raised $20 million in fresh funding from US banking giants, Bank of America, BNY Mellon and Citi.

Digital Assets

Celsius subsidiary GK8 integrates with Polygon while looking for new owner

“This integration affords our customers more agility in managing their crypto assets, which is key to creating new revenue streams.”

Digital Assets

BDO Italia audits Tether reserves to release monthly attestation

World’s largest stablecoin issuer, Tether has switched the accounting firm that audits the massive reserves that back its USDT token to BDO Italia, the 5th largest accounting firm in the world.

Retail FX

Libertex bags multi-year sponsorship deal with FC Bayern

Indication Investments Ltd, the operator of FX retail brand Libertex, has secured a lucrative sponsorship deal with German soccer giant FC Bayern.

Institutional FX

PrimeXM reports lower volumes for July as summer lull bites

PrimeXM has reported weaker trading volumes for July 2022, in line with other institutional and retail platforms that saw the activity of their clients dropped compared to a month earlier.

Retail FX

FCA warns of ATFX Global Trading / ATFXcoin

In its latest clampdown against the specific type of ‘clone fraud’, the Financial Conduct Authority (FCA) has warned local investors to watch out for a company called ATFX Global Trading / ATFXcoin.

Digital Assets

CME Group to roll out options on Ether futures next month

Derivatives exchange CME Group is set to roll out options on Ether futures on September 12 in a move to bring another level of diversification to cryptocurrency traders.

Industry News, Podcasts

Finance Feeds launches Podcasts: Listen to Ep. #1 feat. Dmitri Galinov of 24 Exchange

The team at Finance Feeds are happy to announce the launch of our Podcast series, available on Spotify and other audio services and hosted by our Editor-in-Chief Nikolai Isayev.

<