Stablecoin issuer Circle received final approval Friday from the U.S. Office of the Comptroller of the Currency to operate a national trust bank, moving the reserves backing its $73 billion USDC stablecoin under direct federal oversight for the first time. Shares closed the day up nearly 5 percent.
The charter, which Circle will run under the name Circle National Trust, ends the company's dependence on third-party banks and custodians to hold the cash and Treasury assets that back USDC and gives Circle a single federal regulator in place of 50 state supervisors. It does not authorize Circle to take deposits or make loans.
What the charter allows
The approval lets Circle act as custodian for its own reserves and hold crypto assets for institutional clients, the company said. USDC, a dollar-pegged stablecoin designed to track the U.S. dollar 1:1, has a market value of about $73.2 billion, according to CoinGecko. Circle shares had fallen 20.5 percent this year through Thursday's close, leaving the company with a market capitalization of about $15.7 billion, according to LSEG data.
"OCC approval to establish Circle National Trust marks a defining step in bringing blockchain technology and digital assets into the core of the U.S. financial system," Chief Executive Jeremy Allaire said in a statement.
Federal rulebook
The charter satisfies a requirement of the GENIUS Act, the federal payment-stablecoin framework passed nearly a year ago that obliges large issuers to secure an OCC charter. Circle's chief strategy officer, Dante Disparte, told CNBC the trust structure also simplifies dealings with international counterparties.
"We think of ourselves as a pioneer in ensuring that — even from the very earliest days of stablecoins entering the stream of commerce — they ought to follow the norms for trust, transparency, safety, financial crime compliance and the rest," Disparte said. "Today's announcement codifies that at the federal level."
Race up the stack
The Circle approval arrived the same day global financial messaging network Swift launched a blockchain consortium with 17 banks, including Citi and HSBC, aimed at 24/7 payments. In June, a group of more than 140 companies — including Blackrock, Coinbase, Mastercard, Stripe and Visa — joined the Open USD stablecoin effort, which distributes reserve yields to participating partners rather than a single issuer.
Circle's federal blessing lands as rivals close in. Traditional financial firms increasingly want to issue their own stablecoins, CNBC reported, because doing so lets them capture payment flows and deepen customer relationships instead of relying on third-party issuers like Circle. Recent OCC actions have included approvals or applications from Coinbase, BitGo, Fidelity Digital Assets, Ripple and Paxos.
The OCC did not respond to a CNBC request for comment.