Circle Seeks National Trust Bank License to Strengthen USDC Infrastructure

Stablecoin issuer Circle has formally applied to establish a federally regulated national trust bank in the United States, a move aimed at enhancing oversight of its USDC stablecoin reserves and aligning with evolving regulatory frameworks for digital assets.

Strengthening Regulatory Oversight for USDC

According to a company statement released on June 30, the proposed entity, First National Digital Currency Bank, N.A., would oversee the management of USDC’s reserves on behalf of Circle’s U.S. issuer. In addition to safeguarding stablecoin reserves, the bank would also offer digital asset custody services to institutional clients.

This strategic initiative follows Circle’s successful public market debut earlier in June, which saw its stock price triple on opening day and pushed the company’s valuation beyond $18 billion. The public listing has already subjected Circle to higher regulatory standards through increased disclosures, governance requirements, and routine audits.

Positioning for the GENIUS Act

The trust bank application also positions Circle to comply with anticipated requirements under the GENIUS Act, a stablecoin legislation that passed the U.S. Senate on June 17 and now awaits a vote in the House of Representatives. The bill seeks to establish a comprehensive framework for the issuance and oversight of payment stablecoins in the U.S.

A national trust bank charter, regulated by the Office of the Comptroller of the Currency (OCC), would exempt Circle from securing individual state-level money transmitter licenses. While such trust banks are not permitted to accept cash deposits or issue loans, they can provide custodial services and operate nationwide under a unified federal framework.

Outlook

Should the application be approved, the new national trust bank would mark a significant step for Circle’s regulatory strategy, offering a fortified infrastructure for USDC issuance and operations amid growing demand for oversight and transparency in the digital asset space.

Jeremy Allaire, Co-founder, Chairman, and CEO of Circle, noted,

“By applying for a national trust charter, Circle is taking proactive steps to further strengthen our USDC infrastructure. Further, 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.”

Global Regulatory Push Continues

Circle’s pursuit of a U.S. national trust bank license comes amid a broader effort to secure regulatory approvals in key global markets. In April, the firm received In-Principle Approval from Abu Dhabi’s Financial Services Regulatory Authority (FSRA) to function as a money services provider. More recently, in July 2024, Circle achieved full compliance with the European Union’s Markets in Crypto-Assets (MiCA) regulatory regime, obtaining an Electronic Money Institution (EMI) license from France’s banking authority.

Circle isn’t alone in seeking a federally regulated trust bank license. Financial institutions with digital asset divisions, including industry players like Fidelity, are also in discussions with the OCC to secure similar national bank charters as the U.S. moves toward formalizing crypto asset regulation.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice