Fresh off its massive public offering, Circle, the issuer of the USDC stablecoin, is taking a major step to deepen its integration into the U.S. banking system.
On Monday, the company revealed it has applied to the Office of the Comptroller of the Currency (OCC) to establish First National Digital Currency Bank, N.A. The proposed institution would operate under federal oversight, with a core mandate to manage the reserves backing USDC, the world’s second-largest stablecoin with over $61 billion in circulation.
“Establishing a national digital currency trust bank of this kind marks a significant milestone in our goal to build an internet financial system that is transparent, efficient and accessible,” Circle co-founder and CEO Jeremy Allaire said in a statement.
The move comes just weeks after the U.S. Senate passed the GENIUS Act, which lays out clear compliance requirements for payment stablecoins—rules Circle intends to satisfy through its new trust bank structure.
Trust Bank Wouldn’t Take Deposits or Issue Loans
According to Reuters, Circle’s proposed trust bank wouldn’t operate like a traditional lender. Unlike a commercial bank, it would not issue loans or take consumer cash deposits. Instead, its main purpose would be to directly oversee the reserves backing USDC and hold institutional assets, with the OCC serving as its primary regulator.
Circle’s plans echo those of Anchorage Digital, which became the first digital asset platform to receive an OCC charter in 2021. Currently, USDC’s reserves are managed by BlackRock and custodied by BNY Mellon.
“By applying for a national trust charter, Circle is taking proactive steps to further strengthen our USDC infrastructure,” Allaire said.
“We will align with emerging U.S. regulation for the issuance and operation of dollar-denominated payment stablecoins, which we believe can enhance the reach and resilience of the U.S. dollar.”
He added that the trust bank would serve as market-neutral infrastructure to help institutions build next-generation financial products on top of USDC.
Circle Shares Cool After IPO Frenzy
While Circle’s ambitions to evolve into a federally regulated trust bank grabbed headlines, investors are grappling with the company’s volatile stock performance.
Shares of Circle (ticker: CRCL) closed Monday up just under 1% at $181.29, continuing a modest rebound in after-hours trading. The stock has endured a sharp pullback after an explosive debut—soaring from its IPO price of $31 to nearly $299 in its first weeks of trading.
Over the last week, Circle shares have lost nearly 28% of their value as investors reassess the company’s lofty valuation.
On Monday, JP Morgan analysts issued a notably cautious view, slapping CRCL with a price target of just $80. The bank said it believes the stock is currently overvalued despite Circle’s central role in the stablecoin market.
Quick Facts
- Circle has applied to the OCC to launch a national trust bank called First National Digital Currency Bank.
- The trust bank wouldn’t issue loans or accept deposits but would manage USDC reserves under federal oversight.
- Circle’s IPO stock price soared from $31 to almost $299 before retreating nearly 28% in the past week.
- JP Morgan assigned Circle a conservative $80 price target, citing valuation concerns.
