Circle files to become a National Digital Currency Bank
By Pavithra R
Circle, a global financial technology firm that provides payments and treasury infrastructure for digital businesses, has announced its intend to become a full-reserve national commercial bank, operating under the supervision and risk management requirements of the Federal Reserve, U.S. Treasury, OCC, and the FDIC.
Since its founding, Circle has been animated by the idea that a new global economic system could be built on an internet-native foundation: open, global and interoperable public internet infrastructure for the storage and transmission of value, and ultimately for the intermediation of capital more broadly. The firm envisioned it could build a global digital currency bank, one that enabled frictionless, instant and nearly free payments that combined fiat reserve currencies with open, permissionless blockchains, and eventually building on these open networks to support new forms of capital formation and intermediation.
The capabilities of digital currency and blockchain infrastructure have evolved tremendously over the past 8 years. Launched just three years ago, 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.
“Now, with USDC at more than $27.5 billion in circulation, and building on our long-standing commitment to trust, transparency and accountability in the dollar-denominated reserves backing USDC, we are setting out to become a U.S. Federally-chartered national commercial bank,” wrote Jeremy Allaire CEO of Circle in its blog.
The FinTech company is embarking on this journey 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. With USDC anticipated to grow into hundreds of billions of dollars in circulation, the firm believes that establishing national regulatory standards for dollar digital currencies is crucial to enabling the potential of digital currencies in the real economy, including standards for reserve management and composition.
IBSi Prime News
December 08, 2021
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