Circle, the company behind the world's second-largest stablecoin USDC, filed an application Monday with the Office of the Comptroller of the Currency to establish a federally regulated national trust bank. The proposed entity would be named First National Digital Currency Bank, N.A., and would oversee custody of USDC reserves while providing institutional services.
What to Know:
- Circle filed for a national trust bank charter with the OCC to bring USDC operations under federal oversight
- The charter would allow Circle to operate across state lines without separate licensing requirements
- The move aligns with pending GENIUS Act legislation that would create new regulations for dollar-backed stablecoins
Regulatory Alignment and Strategic Benefits
A federal trust charter would place Circle under direct OCC supervision, mirroring the regulatory framework governing traditional financial institutions. This status would enable the company to operate nationwide without securing individual state licenses, removing a significant barrier that has hindered expansion for many digital asset firms.
The charter would also authorize Circle to provide regulated digital asset custody services to institutional clients. Circle would join Paxos and Anchorage as federally chartered institutions offering crypto-related services under federal banking regulations.
Circle's application represents a strategic response to evolving U.S. cryptocurrency legislation. The company specifically cited the GENIUS Act, which passed the Senate earlier this month and awaits a House vote, as motivation for seeking federal banking status.
CEO Statement and Market Position
"By applying for a national trust charter, Circle is taking proactive steps to further strengthen our USDC infrastructure," Circle CEO Jeremy Allaire said in a statement. "We will align with emerging U.S. regulation for the issuance and operation of dollar-denominated payment stablecoins, which we believe can enhance the reach and resilience of the U.S. dollar, and support the development of crucial, market neutral infrastructure for the world's leading institutions to build on."
Circle went public last month and operates as the issuer of USDC, the world's second-largest stablecoin, and EURC, the leading euro-pegged token.
The company's move toward federal banking status reflects broader industry efforts to integrate digital assets into traditional financial regulatory frameworks.
Regulatory Landscape and Approval Process
The OCC, which supervises national banks and federal savings associations, must review and approve Circle's application before the trust bank can commence operations. The agency has granted similar charters to several cryptocurrency firms in recent years, indicating growing regulatory acceptance of digital asset companies operating within established banking structures.
The trust bank designation would specifically help Circle meet anticipated compliance requirements under the GENIUS Act, which aims to create comprehensive regulatory guardrails for dollar-backed stablecoins. This legislation represents Congress's effort to establish clear rules for stablecoin operations while maintaining the dollar's dominance in digital payments.
Closing Thoughts
Circle's pursuit of federal banking status signals the cryptocurrency industry's continued integration with traditional financial regulation. The company's application, if approved, would establish another precedent for digital asset firms seeking to operate under federal oversight while expanding their service offerings to institutional clients.