The creators of USDC stablecoin have announced plans to become a National Bank and filed with the SEC.
According to a post on Circle’s website by Founder and CEO Jeremy Allaire, the company has begun the process of becoming a full-reserve national commercial bank. The bank would operate under the watchful eye of the Federal Reserve, U.S. Treasury, Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC). Allaire believes that digital banking could change the entire financial system moving forward, making it safer and stronger.
Three years ago, Circle launched the stablecoin USDC and has seen circulation grow to around $27.5 billion in 2021. According to Allaire, “USDC has grown to become an important infrastructure for the new digital currency enabled financial system. From the outset, Circle, in partnership with Coinbase and through the Centre Consortium, designed USDC to conform with stringent U.S. money transmission supervisory and regulatory standards.”
Circle hopes to build on its commitment to trust and transparency to become a U.S. Federally-chartered national bank.
Circle files with the SEC
Allaire’s post continues to explain that Circle is beginning the journey toward becoming a national bank “alongside the efforts of the top U.S. financial regulators, who through the President’s Working Group on Financial Markets are seeking to better manage the risks and opportunities posed by large-scale private-sector dollar digital currencies.”
The CEO says that within the next few years, Circle believes that USDC would grow in valuation to “hundreds-of-billions of dollars,” and will support trillion in low*fight, high-trust economic activity. Additionally, USDC would become commonplace in financial services and online commerce applications. Allaire believes that establishing national regulatory standards for digital currencies running off the dollar is paramount to getting digital currency into the mainstream economy.
The post goes on to say that USDC reserves have always been bound by the permissible investment rules under state regulations. The rules are in place to keep 1:1 dollar liquidity as a way to protect consumers. “To give the market additional reassurance beyond the fact of our regulatory supervision, we have consistently and voluntarily published monthly independent third-party attestations as to the sufficiency of the USDC reserves,” says Allaire.
He added that Circle had recently expanded the attestations to incorporate specifics on the composition of the stablecoin’s reserves. Specifics including the credit quality of the underlying assets.
The company vowed to begin publishing information about the fundamental liquidity of USDC as it inches closer toward national bank-level regulatory supervision. “Similarly, as specific national supervisory standards for dollar digital currencies emerge from the President’s Working Group, we will proactively work with our national regulatory counterparts on the ultimate commercial adoption of new dollar digital currency standards,” concludes Allaire.