Quick overview

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Circle has applied to establish a national trust bank in the United States, marking a significant step forward after its successful initial public offering (IPO) earlier this month, which valued the company at nearly $18 billion.

Circle will be able to hold cryptocurrency assets for institutional clients and act as a custodian for its reserves if the U.S. Office of the Comptroller of the Currency grants the charter

The license would restrict Circle from making loans or accepting cash deposits, which distinguishes it from traditional banks. CEO Jeremy Allaire stated in an interview with Reuters, “Circle has long sought to uphold the highest standards of trust, transparency, governance, and compliance. Becoming a national trust company is a continuation of that, and going public is a major step.”

USDC, a dollar-backed stablecoin issued by Circle, is widely utilized in the cryptocurrency market. Traders often use stablecoins—designed to maintain a stable value, typically pegged 1:1 to the dollar—to move funds between different tokens.

Circle’s reserves, which consist of short-term U.S. Treasury notes, cash, and Treasury repurchase agreements, are managed by BlackRock and held in custody at BNY Mellon. According to Allaire, some of Circle’s USDC reserves will continue to be held at large banks, but the new organization will oversee them. Additionally, thanks to the license, Circle will be able to offer custody services for digital assets on behalf of institutional clients.

Allaire emphasized that the focus will be on the custody of assets such as stocks and bonds, which will be represented as tokens on a blockchain network.