The stablecoin issuer, Circle Internet Group, applied to the Office of the Comptroller of the Currency (OCC) on June 30 to establish a US trust bank called First National Digital Currency Bank. If OCC approves, the trust bank would oversee the company’s reserves of USDC (its dollar-pegged stablecoin) and offer digital asset custody services to institutional clients.
Currently, the BlacRock manages the majority of Circle’s stablecoin reserves, which is not ideal for the company. It makes the stablecoin users susceptible to risks without warranting their safety. Without a strong, trustworthy structure, the company would become vulnerable and would be exposed to legal uncertainties.
Additionally, this will result in token collapse and scaling back the adoption rate. So, the company is applying to the National Trust Bank to strengthen its USDC infrastructure.
The OCC has not yet approved Circle’s application for a national trust bank charter. The process of reviewing the application includes a public comment period of 30 days before finalizing.
Generally, the complete process takes 120 days, examining the necessary documentation, business summary, compliance, requirements of global standards, and outline of the services it aspires to provide.
With over $62 billion in USDC circulation, Circle is thriving in the global competition of digital assets. The company is actively working to terminate its reliance on a third party to oversee its digital asset reserves while strengthening internal control by minimizing risks and enhancing transparency.
Circle applied to establish First National Digital Currency Bank to directly oversee its USDC reserves, reduce reliance on third-party custodians like BlackRock, and strengthen its infrastructure. This move aims to enhance safety, transparency, and legal compliance for stablecoin users.
Circle’s primary goals are to build a transparent, efficient, and accessible internet financial system that is legally compliant. This initiative aims to help Circle meet requirements in the proposed GENIUS Act and fortify its blockchain priority for traditional markets.
Circle currently has over $62 billion in USDC circulation. The application signifies Circle’s move to terminate reliance on third-party oversight of its digital asset reserves, strengthening internal control by minimizing risks and enhancing transparency in the global digital asset competition.
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