Circle plans to become a national digital bank

Karthik Subramanian

Circle, one of the pioneers of the crypto ecosystem and the founder of the stablecoin USDC, seems to be ready for the extra scrutiny and audit as it has announced intentions to get licensed as a national digital bank.

The company had already announced its plans to go public and with over $27.5 billion USDC in circulation, this application of the company to become a bank is likely to have far-reaching consequences for the crypto ecosystem. It remains to be seen how the regulators are going to view this application in the US as the SEC and other authorities do not seem to be as favorable to crypto as the regulators in few other countries.

“It’s an acknowledgment of the global concerns regarding how digital currencies like USDC fit into the financial infrastructure,” said Dante Disparte, chief strategy officer and head of global policy for Circle.

Though the company had started as a crypto payments startup, of late, its focus seems to be more on the growth and the expansion of its stablecoin offering USDC which has grown very quickly as a strong challenger to USD Tether over the last few months. The company believes that if its banking license is approved, then it is likely to see tremendous growth in the amount of USDC in circulation as it would help to push the USDC to mainstream users. This will in turn support a lot of economic activity based out of USDC and though this is likely to be an exciting prospect for crypto supporters, the regulators may not hold a very favorable view, especially the ones in the US.

Already, we have been seeing the SEC cracking down on the growth of crypto with their battles against Poloniex and Ripple and it is quite unlikely, in our opinion, that they would allow a third party application to issue cryptocurrencies into the mainstream unless they have made up their mind about how to work with digital currencies. CBDCs are being tested by various national banks but many of the bigger countries, including the US, are not sure that they are ready for such currencies as yet as they grapple with the likely impact of such cryptocurrencies on the financial ecosystem as a whole.

A lot more preparations need to be done by the different authorities that are involved to prepare the monetary system for the advent of stablecoins and other cryptos before they can even start thinking of either introducing the CBDCs themselves or allowing third parties to circulate their stablecoins into the financial system.

Read this next

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

<