By
Steve Muchoki
April 25th, 2024
Circle has confirmed that it is on course to securing approval for a bank charter and is already discussing with regulators.
Circle Internet Financial Limited has said that it will soon apply for a US crypto bank charter with the Office of the Comptroller of the Currency. The peer-to-peer payments technology company initially disclosed its plans eight months ago, but is yet to submit an application. Furthermore, Circle’s crypto bank charter ambitions come in an era where regulators are making it increasingly difficult to secure such licensing.
According to CEO Jeremy Allaire in a recent interview, Circle has been discussing with regulators since last August. Allaire declined to specify an application date, only saying it is “hopefully in the near future.”
In addition, Allaire also intimated that Circle was “making good progress” with its plans for a formal application. Furthermore, the CEO of the stablecoin issuer spoke glowingly about the role of the Office of the Comptroller of the Currency so far. According to him, working with the federal agency on its bank charter plans had been seamless and free of obstacles. In addition, Allaire also provided insight into the Office’s approach to the development. As he put it:
“They’ve been doing a lot of work laying the groundwork for how they’re going to supervise crypto, how they’re going to supervise stablecoin issuers specifically.”
Circle & US Office of the Comptroller of the Currency Appear to Be Making Headway on Bank Charter
The US Office of the Comptroller of the Currency has already covered a variety of topics with Circle’s management. Many of these directly address the company’s banking ambitions and include interoperability between blockchains. In addition, Allaire confirmed that both parties have discussed assessing the operational risks of a specific blockchain. However, the Office of the Comptroller of the Currency is yet to provide details on its conversations with Circle.
The Office seems interested in realizing Circle’s crypto bank charter plans despite its intensified supervision requirements last November for banks eyeing crypto activities. So far, no crypto-focused company has been able to secure a new banking charter in almost a year.
If Circle is able to successfully secure approval, it would be the fourth federally chartered crypto bank in the US. The crypto payments platform will join the ranks of Anchorage Digital, Protego Trust Bank NA, and Paxos Trust Company. The latter three all currently have at least preliminary approval for a charter.
Acquiring a bank charter will be instrumental to Circle’s future, especially since the US Federal Reserve has stated that stablecoins need more regulation, and issuance should come from banks.
Circle
Circle is the issuer of the second-largest stablecoin USD Coin, and enjoys extensive financial backing. On Tuesday, the company revealed that it raised $400 million from several investors. These include BlackRock Inc, as well as Fidelity Management and Research LLC.
Also, Circle intends to go public via a SPAC deal valued at $9 billion.