Circle, the creators of USDC, announced that it wants to become “a full-reserve national commercial bank.”
Once approved, the Federal Reserve, U.S. Treasury, Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) would supervise the operations of the bank.
Circle believes that full-reserve banking, built on digital currency technology can improve the current financial system. It can lead to not just a radically more efficient, but also a safer, more resilient financial system.
“We are embarking on this journey alongside the efforts of the top U.S. financial regulators, who through the President’s Working Group on Financial Markets are seeking to better manage the risks and opportunities posed by large-scale private-sector dollar digital currencies,” Circle said in the blog post.
Although the company made the announcement on 9th august, it implied its plan of becoming a commercial bank in its S-4 filing on August 6.
“As part of our strategy to reduce our dependence on third parties, we may in the future consider pursuing a U.S. national bank charter or evaluate the acquisition of a national bank. This would allow us to access the Federal Reserve System directly, reducing the costs and time for settling transactions. If we were to acquire a national bank, the acquisition would be subject to approval from the Board of Governors of the Federal Reserve System (the “Federal Reserve”) and the Office of the Comptroller of the Currency (the “OCC”) under the Bank Holding Company Act and the National Bank Act, respectively,” said Circle in its S-4.
Circle’s announcement that it is on a journey to become a bank comes just one month after Circle announced it would be going public on the New York Stock Exchange by merging with the special purpose acquisition company Concord Acquisition Corp.
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