Circle Seeks Federal Banking Charter to Strengthen USDC Operations

• Circle applied to create a national trust bank to manage USDC reserves under federal oversight.

• The proposed bank would offer digital asset custody services, but it cannot accept deposits or issue loans.

• Circle’s stock trades at $181, and the company joins other crypto firms seeking federal banking licenses.

Stablecoin issuer Circle has applied to establish a national trust bank in the United States. The proposed institution would manage the company’s USDC reserve operations under federal oversight.

The Office of the Comptroller of the Currency (OCC) will review Circle’s application for its First National Digital Currency Bank. If approved, the institution would operate as a federally regulated trust bank with the authority to provide digital asset custody services to institutional clients.

Circle’s proposed bank would focus on strengthening infrastructure supporting USDC issuance and circulation. The move represents a significant step toward establishing regulated cryptocurrency operations within traditional banking frameworks.

Regulatory Framework and Benefits

National trust banks operate under specific federal guidelines that differ from traditional banking institutions. These entities cannot accept cash deposits or issue loans to customers. However, they can offer custodial services and operate nationwide under OCC supervision.

The federal charter eliminates the need for individual state-based money transmitter licenses or digital currency permits. This streamlined approach reduces regulatory complexity for companies operating across multiple states.

Circle’s application aligns with requirements under the proposed GENIUS Act. The legislation passed the Senate on June 17 and awaits a House vote before potentially becoming law. The act establishes frameworks for dollar-denominated payment stablecoins and their regulatory oversight.

Circle CEO Jeremy Allaire emphasized the company’s commitment to regulatory compliance. He stated that Circle is proactively strengthening USDC infrastructure and aligning with emerging US regulations for stablecoin operations.

Industry Competition and Timeline

Circle joins several cryptocurrency firms pursuing national bank charters through the OCC. According to industry reports, the financial services company Fidelity’s digital currency division has also filed similar applications.

The stablecoin issuer has explored banking charter options since 2022. Media reports in April identified Circle among multiple crypto firms considering federal banking licenses or charters.

OCC applications undergo a mandatory 30-day public comment period. The regulator typically renders approval or rejection decisions within 120 days of receiving complete applications.

Circle’s banking initiative comes as the company maintains its position in public markets. Circle Internet Group (CRCL) shares traded at $181 during the most recent session, representing a modest 0.48% increase. After-hours trading showed a 1.30% decline to $178.

The company’s stock performance has fluctuated since its public debut on June 5. Shares surged 167% during the initial trading session on the New York Stock Exchange, reflecting investor interest in regulated cryptocurrency operations.

Circle’s federal banking application represents broader industry efforts to establish compliant cryptocurrency infrastructure within existing regulatory frameworks. The outcome may influence similar applications from other digital asset companies seeking federal oversight and operational clarity.