USDC’s Circle Working Towards US Crypto Bank Charter

• Circle has said it is close to filing an application with the OCC for a banking charter.
• The firm says they are already in talks with the regulators.
• Stablecoins remain a primary concern for regulators.

Circle Internet Financial Limited has revealed that they are close to putting in an application for a crypto bank charter with the Office of the Comptroller of the Currency (OCC). It is a move the USDC issuer believes would be instrumental going forward, considering prevalent regulatory concerns.

Bank Charter Application Coming Soon

Circle Internet Financial Limited, a payments solution company and issuer of the USDC stablecoin, had first disclosed its intentions to become recognized as a crypto bank in August last year. However, there was no word that Circle applied with the OCC till now.

According to statements from the company’s CEO, Jeremy Allaire, all that is set to change. He said this at the just concluded Bitcoin 2022 conference. Without giving details on when the company plans to file its applications, the CEO disclosed that it would be “hopefully in the near future.” Allaire’s statements come when regulators actively raise the bar on who can get banking charters.

However, Allaire has revealed that the firm has maintained regular contact with the OCC regarding its goal to be recognized as a bank. Both parties are said to have discussed the risks of blockchain interoperability and the risks posed by different blockchains. The OCC is yet to give any official statement on these said talks. 

Circle’s CEO has also let slip that communications with the OCC have been hassle-free, letting oversight that Circle was making significant strides in its application preparation. Discussing the OCC’s outlook on the crypto market, Allaire said, “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.”

Notably, Circle has just received fresh funding of $400 million from BlackRock, the world’s largest asset manager, and Fidelity Management. Aside from getting a bank charter, the firm also plans to become a publicly-traded company following a merger worth $9 billion.

Stablecoins – The Focus Of Regulators

Stablecoins have become a major source of concern for regulators evaluating the crypto market. There have been worries that several stablecoin issuers do not have the reserves to keep the coins pegged to the specified assets like the dollar in most instances.

However, major stablecoin issuers, including Circle, have maintained that they have enough reserves to back the stablecoin. So far, the statements from regulators in the US SEC and the Treasury indicate that stablecoins may be the first point of call for regulations.

If successful with its application, Circle will join the ranks of Anchorage Digital, Protego Trust Bank NA, and Paxos Trust Company, the only other firms to receive such a charter. Notably, the OCC has not issued a crypto banking charter in over a year.