Circle (USDC) Looks to Become the First Stablecoin Issuer with Full Banking License

On Monday, Jeremey Allaire, the co-founder and CEO of Circle, announced his intentions of becoming a global digital currency bank to enable frictionless, instant, and nearly free payments.

Launched three years ago, Circle is the issuer of the fast-growing stablecoin USDC, which has a market cap of nearly $27.78 billion. USDC now accounts for 24.45% of the stablecoin market share, up from just 8% a year back.

With digital currency and blockchain infrastructure’s long-term positive impact on the world becoming increasingly palpable, “Circle intends 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,” he said.

Recently, Circle issued its transparency report that showed that 61% of its reserves are held in cash and cash equivalents. At the same time, Yankee CDs, US Treasuries, Commercial Paper, Corporate Bonds, and Municipal Bonds & US Agencies make up the rest of the reserve breakdown.

As a step towards becoming a bank, as we advance, Circle will also publish information about the fundamental liquidity of USDC and its liquidity coverage under Basel III. Basel III mandates that 1:1 dollar liquidity is provided to depositors even during infrequent high-stress periods in a 30-day stress case.

Additionally, as specific national supervisory standards for digital dollar currencies emerge from the President’s Working Group, the company will proactively work with the federal regulatory counterparts on the commercial adoption of new dollar digital currency standards. Allaire said,

“We look forward to this next chapter in not just our own evolution into becoming a national commercial bank, but the broader evolution in regulatory standards for global digital currency banking and financial markets.”