Circle applies for a US trust bank license: self-custody of USDC, a key step into federal regulation.

The US dollar stablecoin USDC issuer Circle has applied for a national trust bank license, which may bring USDC under federal regulatory oversight. (Background: Conversation with Dragonfly partner: Circle’s listing redefines the valuation expectations for crypto companies) (Supplementary background: The female stock market guru sold off Circle shares for $240 million over three consecutive days, and the market capitalization of CRCL has approached 95% of the USDC issuance volume) After its listing, the stock price of the stablecoin issuer Circle surged 484% in June, and the company has taken action again. Last night (30th), the company announced that it has submitted documents to the Office of the Comptroller of the Currency (OCC), planning to establish "First National Digital Currency Bank, N.A." If the application is approved, the US dollar stablecoin USDC will officially be placed under federal bank-level regulation. What kind of bank does Circle want to establish? According to CNBC, this new bank will specialize in digital asset custody and USDC reserve management, and will not handle traditional deposits or loans. Choosing the "trust bank" route allows Circle to be directly regulated by the OCC, eliminating the need to apply for licenses state by state when operating across states, making it easier for investors to verify asset transparency and reserve security. Currently, only Anchorage Digital obtained a similar license in 2021, and if Circle's application is successful, it will become the second case in the U.S. Stablecoin Law "GENIUS Act" and Government Attitude The U.S. Congress is currently reviewing the stablecoin legislation "GENIUS Act," which requires all US dollar-denominated stablecoins to have 100% reserves, with details of assets disclosed monthly and managed by regulated institutions. Circle's choice to apply for a trust bank at this time is seen as a more integrated approach to consolidate its business. Co-founder Jeremy Allaire mentioned in a statement: Our goal is to create a highly transparent and efficiency-optimized internet financial system. Significance to the Market and Peers The current circulating supply of USDC is approximately $61.5 billion, with a market capitalization of less than half of Tether's USDT. However, if the license is secured, USDC can be regarded as "bank-grade" digital dollars, which may reduce regulatory uncertainty for institutional investors and financial operators, potentially speeding up the influx of funds. Furthermore, the barrier to operating across states will also decrease, allowing USDC to differentiate itself from competitors like PayPal USD and Tether. Traditional banks may need to reassess their stablecoin strategies or consider the possibility of partnering with Circle. Challenges and Risks The OCC approval process typically takes months to a year, and changes in political winds may also affect the outcome. At the same time, trust banks cannot lend, so Circle needs to maintain profitability within a limited business framework while bearing higher compliance costs. Regardless of the outcome, Circle's application brings new changes to the stablecoin industry, and the progress of the OCC approval and the legislative direction of the "GENIUS Act" are worth our continued attention. Related Reports Circle's stock price soared to $230, setting a new historical high! The GENIUS stablecoin bill has propelled CRCL to soar 530% in two weeks From on-chain to Wall Street: Circle leads the surge, along with 13 other crypto giants lined up for IPO Circle's stock price surpassed $200 again setting a new high! The market capitalization of CRCL has approached 80% of the USDC issuance volume. <Circle applies for a U.S. trust bank license: Self-custody of USDC, a key step into federal regulation> This article was first published in BlockTempo, the most influential blockchain news media.