Circle, the issuer of the popular stablecoin USDC, has announced that they want to become a licensed bank in the United States. Accordingly, the company has filed an application with the US Securities and Exchange Commission (SEC).
According to a post on Circle’s website by Founder and CEO Jeremy Allaire, the company has begun the process of becoming a full-reserve national commercial bank. The bank would operate under the watchful eye of the Federal Reserve, U.S. Treasury, Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC). Allaire believes that digital banking could change the entire financial system moving forward, making it safer and stronger.
Circle files with the SEC
Allaire’s post continues to explain that Circle is beginning the journey toward becoming a national bank alongside the efforts of the top U.S. financial regulators, who through the President’s Working Group on Financial Markets are seeking to better manage the risks and opportunities posed by large-scale private-sector dollar digital currencies.
The CEO says that within the next few years, Circle believes that USDC would grow in valuation to hundreds-of-billions of dollars, and will support trillions in high-trust economic activity. Additionally, USDC would become commonplace in financial services and online commerce applications - as already mentioned in the announcement of their IPO.
Full collateralization of the stablecoin
The post goes on to say that USDC reserves have always been bound by the permissible investment rules under state regulations. The rules are in place to keep 1:1 dollar liquidity as a way to protect consumers.
“Launched just three years ago, USDC has grown to become an important infrastructure for the new digital currency enabled financial system. From the outset, Circle, in partnership with Coinbase and through the Centre Consortium, designed USDC to conform with stringent U.S. money transmission supervisory and regulatory standards." - Jeremy Allaire, Founder and CEO of Circle
He added that Circle had recently expanded the attestations to incorporate specifics on the composition of the stablecoin’s reserves. Specifics including the credit quality of the underlying assets. The company vowed to begin publishing information about the fundamental liquidity of USDC as it inches closer toward national bank-level regulatory supervision.
