Circle targets federally regulated trust status to manage stablecoin reserves, offer custody services

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Circle applied to charter First National Digital Currency Bank to become a federally regulated trust that would manage USDC reserves and expand custody services for institutional clients.

According to a June 30 announcement, Circle applied to the Office of the Comptroller of the Currency (OCC), seeking authority to operate as a national trust bank subject to full OCC supervision.

Approval would permit the new entity to hold and safeguard the assets backing USDC for Circle’s US issuer and to offer crypto custody to pension funds, asset managers, and corporate treasurers.

Circle added that a national charter would align its structure with the GENIUS Act, a bill moving through Congress that would require payment stablecoin issuers to hold segregated reserves in federally regulated institutions.

CEO Jeremy Allaire said the charter “marks a significant milestone in our goal to build an internet financial system that is transparent, efficient, and accessible.”

He noted that the firm aims to “enhance the reach and resilience of the US dollar” by operating market-neutral infrastructure open to global institutions.

Circle trades on the New York Stock Exchange under the symbol CRCL and reported more than $32 billion in USDC circulation at the end of May.

Expanding licensing movement

Circle issued the first New York Department of Financial Services BitLicense in 2015, which gave it a head start in complying with the European Union’s Markets in Crypto-Assets framework last year.

In April, the Abu Dhabi Global Market granted the company in principle approval to operate as a money services provider. Circle said the OCC filing extends that licensing strategy to the US at the federal tier rather than the state level.

The trust bank will act as a wholly owned subsidiary of Circle Internet Group. It will maintain capital and liquidity according to OCC rules and submit to regular examinations. Circle did not provide a launch timeline. OCC evaluations of trust charter applications typically span several quarters.

In its announcement, Circle noted that institutional clients have pressed stablecoin issuers for federally regulated custody options as US lawmakers debate reserve mandates and disclosure standards.

By holding reserves at a national trust, Circle aims to streamline compliance ahead of the potential passage of the GENIUS Act while reducing counterparty risk for large depositors.