Circle, the fintech that created the US dollar stablecoin USDC, has announced it wants to become a fully-fledged commercial bank in the United States.
In a recent regulatory filing with US authorities, Circle stated that a banking framework would reduce risks, including its reliance on third-party payment systems.
Explaining the move to crypto specialist site The Block, Circle’s CEO, Jeremy Allaire, stated that “full-reserve banking, built on digital currency technology, can lead to not just a radically more efficient, but also a safer, more resilient financial system”.
"Fabio Asdurian, Dynasty Global Investments AG co-founder and CEO, agrees, as he sees the move as a natural progression for cryptocurrency providers. “Becoming a fully-fledged financial institution helps make the issuing of cryptos more reliable whilst taking away the unfair tag that all digital currencies operate from shady backrooms”, Asdurian concluded."
Circle’s move follows a similar step taken by rival stablecoin provider Paxos, which has received conditional approval to hold a US national trust bank licence. Stablecoins are cryptocurrencies often directly pegged to other assets, like fiat currencies or precious metal.