Stablecoin Giant Circle Wants to Be Its Own Bank, Applies for National Trust License

Just weeks after its blockbuster IPO, USDC stablecoin issuer Circle announced Monday that it is seeking approval from the Office of the Comptroller of the Currency, or OCC, to launch a national trust bank.

Circle is seeking to establish First National Digital Currency Bank, N.A., which would fall under OCC oversight and supervise management of the reserves that underpin USDC, the second-largest stablecoin by market cap with over $61 billion worth of dollar-pegged tokens in circulation.

According to a statement by Circle, a federal trust charter would also help give USDC compliance under the GENIUS Act stablecoin legislation, which recently passed the Senate.

“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,” said Circle co-founder, Chairman, and CEO Jeremy Allaire, in a statement.

“By applying for a national trust charter, Circle is taking proactive steps to further strengthen our USDC infrastructure," he added. "Further, 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, and support the development of crucial, market neutral infrastructure for the world’s leading institutions to build on.”

Per Reuters, which first reported the move, Circle would not be able to conduct certain banking activities like making loans or taking cash deposits with this kind of charter. However, it would allow Circle to effectively oversee its own reserves—with OCC oversight—and take custody of assets for institutions.

Crypto platform Anchorage Digital was the first digital assets firm to receive an OCC charter back in 2021. BlackRock currently manages USDC reserves, which are held by BNY.

JP Morgan Rates Circle ‘Underweight,’ Sets $80 Price Target

JP Morgan analysts initiated coverage of Circle with an “Underweight” rating on Monday, arguing that the stablecoin issuer’s stock has become overvalued since its blockbuster initial public offering ignited fervor for stablecoins on Wall Street. “We think highly of the Circle management team and are confident in the outlook for outsized stablecoin and USDC growth,” the analysts wrote in a note. “However, we see Circle’s current market capitalization elevated.” JP Morgan analysts penciled in a pr...

CRCL stock finished the day up less than a percentage point at $181.29, and has continued to tick up in after-hours trading. Circle had a monstrous IPO and first couple trading weeks, jumping from an offering price of $31 to a peak of about $299.

However, the stock has been crashing back towards earth in recent days, falling nearly 28% over the last week. On Monday, JP Morgan gave CRCL a price target of just $80, saying it believes the stock is currently overvalued.

Editor's note: This story was updated after publication with additional details.