Circle to Submit Banking Operation Application Imminently

Boston-based cryptocurrency payments startup Circle Internet Financial will shortly submit its application to operate as a bank in the United States.

With the announcement from CEO Jeremy Allaire, Circle, which issues the second-largest stablecoin USD Coin, is pushing ahead with its intention to become a crypto bank, which it initially declared last Aug.

Since then, Circle management has been in discussions with the U.S. Office of the Comptroller of the Currency, which regulates bank charters. 

OCC conversations

While Allaire declined to say when exactly the company would be submitting the application, merely stating “hopefully in the near future,” he acknowledged that Circle had been “making good progress” with the OCC.

Although a representative for the OCC declined to comment on the discussions, Allaire alluded to issues such as interoperability between blockchains, as well as assessing operational risks involved with certain blockchains.

“They’ve been doing a lot of work laying the groundwork for how they’re going to supervise crypto, how they’re going to supervise stablecoin issuers specifically,” Allaire said.

Prospective approval would make Circle the fourth federally-chartered crypto bank in the U.S., following preliminary approval for Anchorage Digital, Protego Trust Bank NA, and Paxos Trust Company.

But while Allaire has said that there have been no delays or obstacles in working with the OCC so far, the regulator raised supervision requirements for banks intending to engage in crypto activities in Nov last year.

Additionally, it has not granted a new banking charter to any crypto-related company in nearly a year. 

Meanwhile, the Federal Reserve, among other U.S. regulators, believes that stablecoins still require further regulation and should only be issued by banks.

BlackRock funding

Earlier this week, Circle raised $400 million in a funding round led by BlackRock and Fidelity Management and Research. As part of a broader partnership, New York-based BlackRock has also been serving as a primary asset manager for USD Coin’s cash reserves, in addition to exploring capital-market applications for the stablecoin.

Recently, BlackRock CEO Larry Fink acknowledged that the company had begun research into applications for digital currencies and stablecoins.

Circle also has intentions to go public through a merger with a special purpose acquisition company, which it managed to refinance, giving it a potential valuation of $9 billion.