Following the remarkable performance of its initial public offering (IPO) in June this year, Circle (CRCL), the issuer of the world's second-largest stablecoin $USDC, is once again making significant moves. According to (Reuters), Circle has submitted an application to the Office of the Comptroller of the Currency (OCC) to establish a federal trust bank.
Reports indicate that if the application is approved, Circle will be able to independently manage the reserve assets of its stablecoin $USDC and provide custody services for institutional-grade clients in crypto assets. However, unlike traditional commercial banks, a trust bank license does not authorize operators to conduct cash deposit business or issue loans.
Creating the 'First National Digital Currency Bank'
(Reuters) mentioned that the trust bank Circle intends to establish will be named 'First National Digital Currency Bank, N.A.'
So far, Anchorage Digital is the only digital asset company in the US to hold a federal trust bank license.
Circle CEO Jeremy Allaire stated in an interview: 'We are committed to pursuing the highest standards of trust, transparency, governance, and compliance. Listing is just one part of it, and becoming a federal trust bank is a continuation of this process.'
The $USDC issued by Circle is a stablecoin pegged to the US dollar at a 1:1 ratio, widely used for fund transfers and payment scenarios in the cryptocurrency market. With the rapid increase in demand for stablecoins in recent years, the market generally expects stablecoins to become a part of the instant payment infrastructure.
Currently, the reserve assets of $USDC mainly include short-term US Treasury bonds, overnight repurchase agreements, and cash, held in custody by BNY Mellon and managed by BlackRock.
Focusing on 'tokenized stocks' and on-chain asset custody
Jeremy Allaire revealed that if approved to establish a trust bank, the new entity will manage the reserves of $USDC, although some assets will continue to be held in major commercial banks.
Although the new bank is qualified to provide custody for crypto assets, Jeremy Allaire emphasizes that Circle's main goal is not to custody cryptocurrencies like Bitcoin and Ethereum, but to focus on custody services for on-chain securities such as 'tokenized stocks' and 'tokenized bonds.' He pointed out that these tokens representing traditional financial assets may become a new option for institutional investors' asset allocation.
Is Circle expected to capture regulatory dividends?
At the beginning of June this year, Circle officially listed on the New York Stock Exchange (NYSE) under the ticker symbol CRCL, with an issuance price higher than expected, reaching $31 per share. On its first day of trading, the stock surged by as much as 235%, and the fundraising process attracted over 25 times oversubscription, indicating a high level of market interest.
In response, Bernstein quickly added Circle to its coverage and gave it an 'outperform' rating, setting a target price of $230. The report noted that under the strong push for stablecoin regulatory legislation (GENIUS Act) in the US, $USDC is expected to become the first regulated stablecoin, thus gaining a 'first-mover advantage' in compliance.
JPMorgan has a pessimistic outlook - are concerns over stablecoin competition and CBDCs valid?
In contrast, analysts at JPMorgan Chase assigned a 'underweight' rating and set a target price of $80 for December 2026. JPMorgan's cautious stance is primarily due to concerns about the intense competition in the stablecoin space and the potential threat posed by central bank digital currencies (CBDCs) to Circle's growth prospects.
As of the time of writing, the market capitalization of $USDC is approximately $61.5 billion, firmly maintaining its position as the second-largest stablecoin globally; Circle's stock closed at $181.29 on Monday, with a market capitalization exceeding $43.7 billion.
This article is reprinted with permission from: (Block Ke)
Original title: (IPO momentum continues, USDC issuer takes action! Circle applies for a 'trust bank' license in the US)
Original author: Block Sister MEL
'USDC issuer takes action! Circle applies for a trust license to create the first digital currency bank' was first published in 'Crypto City'
