Circle’s Application: Circle, issuer of USDC, has applied for a U.S. national trust bank charter to manage its stablecoin reserves and offer institutional custody services.
Regulatory Alignment: The move aligns with the proposed GENIUS Act, aiming to integrate stablecoins into the U.S. financial system under federal oversight.
Strategic Shift: Post-IPO at an $18 billion valuation, Circle aims to directly oversee USDC reserves, reducing reliance on external custodians like BNY Mellon.
Market Impact: The charter could position USDC as a preferred stablecoin for U.S.-regulated institutions, challenging Tether’s dominance.
Institutional Focus: The proposed First National Digital Currency Bank, N.A., will offer custody for tokenized assets, excluding cryptocurrencies like Bitcoin.
In a significant step toward bridging cryptocurrencies and traditional finance, Circle Internet Group, the issuer of the world’s second-largest stablecoin, USDC, has applied for a national trust bank charter with the U.S. Office of the Comptroller of the Currency (OCC). Announced on June 30, 2025, this move follows Circle’s blockbuster initial public offering (IPO) in June, which valued the company at nearly $18 billion. The application to establish First National Digital Currency Bank, N.A. aims to bring Circle under direct federal oversight, aligning with emerging U.S. stablecoin regulations and positioning USDC as a leader in the regulated digital asset space.
JUST NOW: Circle applies for national trust bank license in the US.
— Trench Talk (@TrenchTalkDaily) June 30, 2025
Why a National Trust Bank Charter Matters
A national trust bank charter would allow Circle to operate as a federally regulated trust institution, subject to the OCC’s stringent oversight, similar to traditional financial institutions. Unlike a conventional bank, the proposed trust bank would not accept deposits or issue loans. Instead, it would focus on managing USDC reserves and providing custody services for tokenized financial assets, such as stocks and bonds, though not for cryptocurrencies like Bitcoin or Ethereum. This charter would enable Circle to operate nationwide without needing separate state licenses, a significant hurdle for many digital asset firms.
Circle’s CEO, Jeremy Allaire, emphasized the strategic importance of this move, stating, “By applying for a national trust charter, Circle is taking proactive steps to further strengthen our USDC infrastructure. We will align with emerging U.S. regulation for the issuance and operation of dollar-denominated payment stablecoins, which we believe can enhance the reach and resilience of the U.S. dollar.”
Aligning with the GENIUS Act
The application comes as U.S. lawmakers advance the GENIUS Act, a proposed federal framework for stablecoin issuers that mandates fully backed reserves and transparent monthly disclosures. Having passed the Senate in June 2025, the bill awaits House approval and is expected to be signed into law by President Trump. By pursuing a trust bank charter, Circle positions itself to meet these requirements, potentially giving USDC a first-mover advantage over competitors like Tether, which operates under El Salvador’s registration and lacks U.S. federal regulation.
A Shift in Reserve Management
Currently, Circle’s USDC reserves—comprising short-term U.S. Treasury bills, repurchase agreements, and cash—are held at institutions like BNY Mellon and managed by BlackRock. If approved, the trust bank would allow Circle to directly manage a portion of these reserves, reducing reliance on external custodians while maintaining some partnerships. This move enhances transparency and control, addressing institutional demands for federally regulated custody options as tokenized assets gain traction.
Challenging Tether’s Dominance
Tether’s USDT holds a 62.5% share of the global stablecoin market, driven by its liquidity and widespread exchange integrations, particularly in Asia. However, Circle’s trust bank bid could shift the balance in the U.S., where regulatory compliance is increasingly critical. As U.S. exchanges may face pressure to delist unlicensed stablecoins, USDC could become the preferred choice for banks, fintechs, and regulated institutions. For everyday users, this could mean broader USDC integration in wallets, payment apps, and tokenized finance applications like real estate and stocks.
Circle’s Track Record of Compliance
Circle has a history of regulatory firsts, including securing the first NYDFS BitLicense in 2015 and complying with the EU’s Markets in Crypto-Assets (MiCA) framework in 2024. In April 2025, it received in-principle approval to operate as a money services provider in Abu Dhabi’s financial free zone. The OCC filing extends this strategy to the U.S. federal level, reinforcing Circle’s commitment to transparency and compliance.
Market Context and Impact
The stablecoin market is evolving rapidly, with USDC holding over $61 billion in circulation as of June 2025, making it the second-largest stablecoin after Tether. The table below compares the market cap of major stablecoins as of June 2025:
Stablecoin Market Cap (USD) Issuer Regulatory Status USDT ~$112 billion Tether El Salvador registration USDC ~$61 billion Circle U.S., EU, Abu Dhabi licenses DAI ~$5.4 billion MakerDAO Decentralized
Source: CoinMarketCap, June 2025
Circle’s move has sparked discussions on platforms like X, with users noting its potential to integrate stablecoins into traditional banking. X’s posts recently commented on this development.
@circle is applying for a U.S. national trust bank charter, post-IPO, to launch "First National Digital Currency Bank, N.A." This will allow the company to self-custody its USDC reserves.#USDC
— Cryptopress (@CryptoPress_ok) July 1, 2025
Looking Ahead
The OCC’s review process for trust charter applications typically spans several quarters, meaning Circle’s First National Digital Currency Bank may not launch until 2026. If approved, Circle would join Anchorage Digital as one of the few crypto firms with a national trust bank charter, further solidifying its role in the evolving internet financial system. Analysts from Citi and Barclays have expressed optimism about Circle’s regulatory strategy, though JPMorgan has cautioned about potential valuation volatility.
For investors and users, Circle’s application signals a future where stablecoins like USDC could become as commonplace as traditional financial instruments, reshaping payments, custody, and tokenized finance in a regulated framework.
The post Circle’s Bold Move: USDC Issuer Seeks U.S. National Trust Bank Status appeared first on Cryptopress.
