Circle to restructure into commercial cryptocurrency bank
Circle will become a 'commercial cryptocurrency bank with full provisioning', regulated under the risk management requirements of the Fed, US Treasury Department, OCC and FDIC.
CEO Jeremy Allaire said plans to build a global digital asset bank around Circle have been present since its inception.
According to the CEO, the move to such a structure would strengthen USD Coin Stablecoin (USDC) and build "a more efficient, secure and sustainable financial system".
"With USDC's market offering exceeding $27.5bn, building on our long-standing commitment to trust, transparency and accountability of the USD reserves securing Stablecoin, we intend to become a commercial bank with a national charter," Allaire said.
Circle expects USDC turnover to reach "hundreds of billions of dollars" in "the coming years". With the increased demand for Stablecoin and for the sake of increased self-monitoring, the company intends to publish reports on the liquidity of the asset in accordance with the recommendations of the Basel Committee on Banking Supervision under the BIS.
Allaire also stressed that as national standards for the oversight of 'dollar digital currencies' emerge, including those developed by the PWG, Circle will actively work to implement them.
The USDC issuer is a consortium of Centre, run by Circle in conjunction with bitcoin exchange Coinbase. In July, Allair disclosed information about the security of Stablecoin: most of the 'stablecoins' are backed by US dollars, while the rest are backed by bonds and other highly liquid assets.
According to The Block, the market value of all Stablecoins in circulation exceeds $81bn. The segment leader is Tether (USDT) with a capitalisation of ~$32.2bn. USDC is in second place with $27.9bn.
Circle is not the only one of the companies behind the Stablecoin issuance trying to get licensed by national regulators. Paxos, for example, holds a conditional nationwide trust bank licence and plans to obtain a clearing agency licence.
In July, Circle announced an impending reverse merger with SPAC Concord Acquisition Corp. Its securities will be listed on the New York Stock Exchange under the ticker CRCL. The company was valued at $4.5 billion before the merger.
In August, the organization announced that Concord will conduct an additional issue of shares for $546 million for the takeover.
Recall that in July, Senator Elizabeth Warren called for stricter regulation of cryptocurrencies in the USA. In the same month, Fed chief Jerome Powell questioned the need for stable coins.
In the same month, the U.S. Treasury Department proposed a ban on certain Stablecoins.