Circle is aiming to become a national trust bank with a completely new policy. After a successful IPO that exceeded expectations and sent its stock soaring, Circle has officially filed for a banking license called First National Digital Currency Bank, N.A. If approved, this will be a major step for Circle to directly manage up to $60 billion in reserves without going through an intermediary. This will not only help solidify Circle's position in the stablecoin space, but also be an important milestone for the cryptocurrency market when a cryptocurrency company takes the step to be granted a national banking license, similar to Anchorage Digital Bank before it. With its deep understanding of regulations and markets, Circle promises to make a big impact on the future of digital finance.
Circle Pushes Forward with Plans to Create National Trust Bank
Circle has formally proposed the establishment of a national trust bank, First National Digital Currency Bank, N.A., with the U.S. Office of the Comptroller of the Currency (OCC). This is a strategic move that will give the company legal authority to directly manage its $60 billion in reserves, which consist primarily of cash and short-term U.S. Treasury securities. Owning a national banking license will help Circle increase its control over its assets, reduce its reliance on third parties, and increase the credibility of its stablecoin USDC – the second largest stablecoin by market value.
This license will make Circle the second crypto company to be granted a national trust bank license in the United States, following Anchorage Digital Bank, opening up a legitimate and sustainable legal development path for crypto businesses looking to gain deeper access to the traditional financial system.
Circle Stock Booms After IPO, and Concerns From Parts of Wall Street
Circle shares surged from their IPO price of $31 to a peak of nearly $299 after news of the stablecoin bill passed by the U.S. Senate on June 17. The move sent a wave of positivity through the crypto industry, with major names like Fiserv, Mastercard, Amazon, and Walmart also pushing ahead with plans to issue their own stablecoins. However, the rapid growth has left some analysts concerned about the sustainability of the rally, including Kenneth Worthington of JPMorgan.
Kenneth believes Circle’s stock is at an unsustainable valuation with growing competition risks. He notes that the emergence of tokenized deposit accounts and digital money market funds could allow new competitors to gain market share, eroding Circle’s lead in the stablecoin space.
In-depth analysis of Circle stock future in legal and valuation context
Analysts are divided on Circle stock. It currently trades at a price-to-earnings ratio of more than 120 times, a level similar to tech stocks like Tesla and AI companies. Of the analysts tracked by Bloomberg, six recommend buying, six recommend holding, and two warn against selling. The near-term volatility is expected to continue as regulatory and market changes come into play.
Brian Bedell of Deutsche Bank said that while the long-term growth potential of stablecoins is huge, the volatility in earnings and stock prices in the coming period will be significant. In contrast, institutions such as Needham and Barclays see Circle as a potential long-term investment, especially as stablecoins become more widely adopted in the areas of payments, international remittances and other traditional financial services.
Circle and the journey to conquer the US legal framework
Circle is no newcomer to US cryptocurrency regulations. The company has held a BitLicense in New York since 2015 and holds multiple money transmitter licenses in several states. The new national banking license is considered the crown jewel in Circle’s licensing scheme, giving the company greater access to institutional capital and reducing its reliance on outside custody services.
Still, the market remains cautious. Circle shares fell about 25% last week after a strong rally, reflecting the volatility of the cryptocurrency industry in general and stablecoins in particular. However, the rapid recovery also shows that the potential for a revival and continued investor interest in the sector is still strong.
Source: https://tintucbitcoin.com/circle-xin-phep-cap-giay-phep-ngan-hang/
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