Circle (CRCL), the stablecoin issuer, has formally applied with the Office of the Comptroller of the Currency (OCC) to get a national trust bank charter, it said in a press announcement late Monday.
If the national bank regulator grants Circle approval, it plans to spin up a national trust bank called First National Digital Currency Bank, N.A. Such a charter would allow the crypto firm to custody and manage the reserve assets behind its own stablecoins and offer other fiduciary services. It would not allow Circle to accept cash deposits or issue loans.
“Establishing a national digital currency trust bank of this kind marks a significant milestone in our goal to build an internet financial system that is transparent, efficient and accessible,” Circle CEO Jeremy Allaire said in a statement.
Reuters was the first to report this development.
The move would allow Circle, which has seen its stock soar after its recent IPO, to manage the reserve assets for the stablecoins it issues, thus strengthening the firm’s competitive position. It would also check the box for a requirement all US stablecoin issuers are expected to meet under related legislation.
Only one other crypto firm, Anchorage Digital, holds such a license. Currently, Circle’s reserves are held in custody by the Bank of New York Mellon (BK) and managed by BlackRock (BLK).
Circle’s stock opened 2% lower on Tuesday. It’s up 470% from its June 5 IPO price of $31.
President Donald Trump has promised to make America the “crypto capital of the world” and since he’s taken office, the crypto world has seen a flood of doors open to mainstream finance.
And no other corner of the industry so far has attracted so much attention from Wall Street as Circle’s corner, the $253 billion stablecoin market.
From Wall Street banks like JPMorgan Chase (JPM)and Bank of America (BAC) to credit card giants Visa (V) and Mastercard (MA), fintech firms, and even Big Tech companies, a swath of corporate America is gearing up their stablecoin strategies ahead of passage of the first-ever US stablecoin legislation later this year.
Unlike other cryptocurrencies, the value of stablecoins isn’t intended to fluctuate. Instead, they act as a safe haven for investors waiting out crypto’s volatility and in that way are seen as a potential gamechanger in the world of cross-border payments.
In practice, stablecoins are managed like money market funds, where for every dollar users put in, issuers must set aside assets in reserve.
Known as the GENIUS Act, this stablecoin bill would set standards for how US banks and other financial companies can offer stablecoins and how they would need to manage their reserves in cash and US Treasuries. It would also call for issuers of a certain size to be overseen by the OCC, opening the stablecoin market to a far wider range of players.
Another broader crypto market structure bill that is expected to take longer to pass, known as the Clarity Act, will open more doors. This bill includes tokenization, which would clear a path for US firms to begin offering blockchain versions of other assets, such as bank deposits, stocks, and bonds.
As issuer of the world’s second-largest stablecoin, USDC (USDC-USD), Circle is well positioned to benefit from so much new interest.
While no one is quite sure how much stablecoins could change global payments, there’s already a flurry of proponents predicting a lot of growth ahead.
Treasury Secretary Scott Bessent told lawmakers last month that passing stablecoin legislation could help push the US stablecoin market beyond $2 trillion by the end of 2028.
“We view CRCL as an investor must-hold, to participate in the new internet-scale financial system built for the next decade,” Bernstein analyst Gautam Chhugani, who initiated coverage of Circle on Monday, said in a note.
Bernstein expects the global stablecoin market to grow to $4 trillion over the next decade.
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. His email is david.hollerith at yahoofinance.com.
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