09.12.2021

USDC May Become First Official US Banking License

On Monday, Circle co-founder and CEO Jeremy Aller announced his intention to become a global digital currency bank to provide seamless, instant and near-free payments.

Circle is the issuer of the fastest growing stablecoin USDC, and now it is confidently ranked second after USDT. USDC has a market capitalization of nearly $ 27.78 billion. USDC now accounts for 24.45% of the total stablecoin market, up from 8% a year earlier.

As the long-term positive impact of digital currency and blockchain infrastructure on the world is becoming more tangible.

“Circle intends to become a national commercial bank with a reserve operating under the oversight and risk management requirements of the Federal Reserve, the US Treasury, the OCC and the FDIC,” Aller added.

Circle recently released a report that showed that 61% of its reserves are held in cash and cash equivalents. At the same time, US Treasury bonds, commercial paper, corporate bonds, and municipal bonds make up the rest of the reserve breakdown.

In order to become a bank, Circle will also publish information on the fundamental liquidity of the USDC and its liquidity coverage in accordance with Basel III (Basel III). The Basel Committee document requires depositors to be provided with liquidity at a 1: 1 ratio, even during infrequent periods of high stress.

In addition, as specific national standards for the oversight of digital dollar currencies emerge, the company will actively work with federal regulators to commercialize the new dollar digital currency standards.

Circle announced last month a plan to go public through a dedicated targeted mergers and acquisitions (SPAC) company. The resulting education is expected to cost around $ 4.5 billion.

In the US, meanwhile, there is ongoing talk about the need to strengthen regulation of stablecoins. In particular, the chairman of the governing council of the FRS Jerome Powell and the minister of finance Janet Yellen made the corresponding remarks.

Circle itself explains the need for a banking license as a desire to avoid risks, including reducing its dependence on third-party payment systems. Paxos, which also issues stablecoins in the United States, has previously received preliminary approval for a banking and trust license from the Office of the Comptroller of the Currency.

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