Cryptocurrency News

Circle Is Closing In On Opening A US Crypto Bank Charter

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Top stablecoin issuer, Circle, has announced that its negotiations with US financial regulators remain positive. Thus, the firm is confident that it is only a matter of time before it opens a US-based crypto bank charter.

Speaking to Bloomberg reporters at the 2022 Bitcoin event in Miami, one of the company’s top-level officers, Jeremy Allaire, revealed that Circle has been negotiating with US authorities over this issue for about eight months now.

The USDC issuer hasn’t submitted its crypto charter proposal yet, and Allaire only stated that the company would do so soon without specifying a date for when it would do so. As previously reported in various media last august, Circle filed with the SEC last August to obtain a license to run a full-reserve stablecoin commercial bank with all deposits domiciled in USDC.

Making Good Progress 

The Circle team remains in negotiations with the US office of the comptroller of the Currency (OCC) concerning this matter. Allaire revealed Circle’s discussions with the OCC have centered around blockchain interoperability and operational risks associated with each blockchain. Risks here include crypto bridge risks and hacks, as exemplified by the recent $650m hack on Axie Infinity.

He also said that the USDC issuer had made significant progress to complete their application process as the OCC hasn’t created any delay or hindrance. However, Allaire noted that Circle’s progress is remarkable. The OCC’s supervision requirements for financial institutions willing to open a crypto bank charter in the US were modified significantly last November. He added that “the OCC regulates all bank charters in the US, and they are making a lot of preparations on how they will perform oversight functions on crypto, including stablecoins.”

FDIC Warns Crypto Investors 

Despite the preparations by the occ, another federal agency (the federal deposit insurance corporation, FDIC) issued a warning recently stating that cryptos such as BTC and the altcoins have inherent risks and aren’t ideal investments for anyone who isn’t financially stable.

Also, the FDIC further mandated all banks under its jurisdiction to disclose any current or planned crypto transactions with the bank to the agency. It claimed that it is the exclusive right of the agency to confirm that such transactions are safe and aren’t too risky to the consumer. The FDIC added that it is the only authority to analyze the financial stability of such operations.

Circle’s Latest Funding Round Generates $420M

Circle has been in the news recently for another positive reason. Earlier in the week, the USDC issuer announced that it realized $420m in its latest crypto funding round. Some of the top backers in this funding round include Blackrock, Fin Capital, Fidelity, and Marshall Wace.

One significant aspect of this latest funding round is that Blackrock will assist Circle in integrating USDC with the traditional capital market – a first of its kind. Circle’s USDC stablecoin is the second-largest stablecoin after USDT in market cap.

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