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Circle wants US banking license: A new crypto giant is emerging!
Circle is applying for a US banking license to custody USDC and tokenized assets. Stock value increases after IPO.
Circle wants US banking license: A new crypto giant is emerging!
Circle, the issuer of the stablecoin USDC, has taken a significant step towards its expansion by applying for a national banking license in the United States. This application was submitted to the US banking regulator OCC (Office of the Comptroller of the Currency). The proposed bank, to be called “First National Digital Currency Bank, N.A.” will focus exclusively on the custody of tokenized assets, without offering traditional banking services such as cash deposits or loans, such as The shareholder reported.
The new banking license would allow Circle to act as the official custodian for USDC reserves. This could significantly increase confidence in USDC and further expand business with institutional customers. The company has a clear strategy to increase transparency and governance standards beyond its current practices, especially as the filing coincides with Circle's IPO, which boosts the company's valuation to nearly $18 billion. The share price is currently $181.29 with a market capitalization of over $40 billion.
Focus on tokenized assets
Circle plans to self-manage its USDC reserves and offer digital asset custody services to institutional investors. This strategy means the company can move in-house some of its current external custody services, which are currently provided by major financial institutions such as BNY Mellon and BlackRock. Circle's focus here is on the custody of tokenized real-world assets such as stocks and bonds, not traditional cryptocurrencies such as Bitcoin or Ethereum Blockonomy highlights.
The creation of the new trust bank could provide Circle with far-reaching benefits and lead the way in the face of upcoming US legislation requiring monthly reserve disclosures and strict liquid asset requirements. The U.S. Senate passed a bill in June, with a House vote expected in the coming months. If the application is approved, Circle could become the second digital company with a U.S. license. Become a trust bank license, according to Anchorage Digital.
Analysts are watching developments closely to assess whether Circle's business model justifies the rapid increase in the company's valuation. The IPO on June 5, 2023 was already a great success, as the stock rose 167 percent and the original issue price of $31 was oversubscribed 25 times. This dynamic could now continue in a more stable and regulated environment.