Circle, the issuer of the second largest stablecoin USDC, has received final approval from the Office of the Comptroller of the Currency (OCC) for First National Digital Currency Bank, which will operate as Circle National Trust. The approval converts the conditional green light granted in December into a full charter, making Circle the first in that five firm cohort to complete the journey. Coinbase received a preliminary approval in April, while Ripple, Paxos, BitGo and Fidelity Digital Assets remain at the conditional stage.
At launch the bank will do one thing, which is to provide digital asset custody for Circle and its affiliates. Managing the USDC reserve is planned as a future capability. According to the business plan approved to the OCC, the bank “may eventually offer its digital asset custody service to a limited number of institutional customers directly, focusing on banks and other financial institutions, such as regulated derivatives organizations.”
Notably, the national trust bank will not issue USDC. The OCC approval discloses that Circle has applied to the New York Department of Financial Services (NYDFS) for a limited purpose trust company and plans to move USDC issuance to that entity once it is established. In other words, Circle is building a two part structure in which a state regulated company issues the stablecoin and the federal bank safeguards the assets behind it. Ripple already issues RLUSD through a New York trust company and has applied for a national trust charter to manage reserves, an application currently at the conditional approval stage. Paxos and BitGo have gone the other way by converting their New York charters into federal ones.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
