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- Circle is prepared to become a full-reserve national commercial bank
- The bank will operate under the supervision and risk management requirements of the US authorities
- The cryptocurrency firm will work with its national regulatory counterparts on the ultimate commercial adoption of such a new system
Circle is a United States-based cryptocurrency firm. The firm is also behind the world’s second most popular stablecoin USD Coin (USDC). Recently, the firm revealed that it is on a journey to become the national digital currency bank. In a recently published post by Jeremy Allaire, Circle’s Chief Executive Officer, he envisioned that the firm could build a global digital currency bank. Such banks could enable frictionless, instant, and nearly free payments. Moreover, such banks will combine the fiat reserve currencies with open, permissionless blockchains. And eventually, such banks will be developed on open networks to support new forms of capital and intermediation.
Circle to become US federally-chartered national bank
According to the recently shared post, Allaire noted that the capabilities of crypto assets and the underlying technology had evolved tremendously. Over the past eight years specifically, the CEO of Circle has observed that the industry’s positive impact on the world is increasingly palpable. Allaire explained the growth of the sector as heightened engagement with leading financial regulators globally.
Following the scenario, the crypto firm partnered with one of the leading crypto assets exchanges, Coinbase. And they both introduced the USD Coin to obey the United States money transmission supervisory and regulatory norms. Indeed, currently, the stablecoin is now at more than USD 27.5 billion in circulation.
Hence, Allaire revealed that his firm is setting out to become a United States federally-chartered national commercial bank.
What does the crypto firm intend?
According to Allaire, they intend to become a full-reserve national commercial bank, operating under the US authorities’ supervision and risk management requirements. Such authorities include the Federal Reserve, US Treasury, Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC). Additionally, Circle believes that full-reserve banking, created on digital assets technology, can lead to a radically more efficient, secure, and more resilient financial world.
The work is in progress
According to Allaire, the work on the creation of such a bank is being done alongside the efforts of the top US financial regulators. Such regulators are those who, through the President’s Working Group on Financial Markets, also known as the Plunge Protection Team, are observing to manage better the risks and opportunities integrated by large-scale private-sector dollar currencies.
Moreover, the cryptocurrency firm will work with its national regulatory counterparts on the ultimate commercial adoption of such a new system. The aforementioned factor came as specific national supervisory standards for stablecoin emerged from the Plunge Protection Team.
What about the future of the USDC?
For the future of the USD Coin, Circle anticipates that it will grow into hundreds of billions of coins in circulation. Furthermore, USDC will also support trillions of dollars in economic activity.
