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Stablecoin provider Circle has been granted a licence to carry out certain banking activities in the US, in the latest sign of the Trump administration’s push to bring crypto assets into the financial mainstream.
Shares in the company, which have fallen this year as it has faced growing competition, were up more than 7 per cent on Friday after the Office of the Comptroller of the Currency said it could operate as a trust bank. The move allows Circle to directly manage the reserves that back its $73bn stablecoin USDC, rather than relying on other institutions for custody of its assets, and brings it under federal regulation.
The licence does not mean Circle’s new banking entity — Circle National Trust — will be able to perform all traditional banking functions, such as lending or taking deposits.
Circle and four other stablecoin issuers received preliminary approval to set up trust banks late last year as part of Donald Trump’s embrace of the crypto industry during his second term.
Trump himself made roughly $1.2bn from his various crypto-related ventures last year, recent financial disclosures show.
The president’s Genius Act, passed last summer, created the first regulatory framework for stablecoins — dollar-pegged tokens popular with crypto traders that have grown to a $310bn market.
“OCC approval to establish Circle National Trust marks a defining step in bringing blockchain technology and digital assets into the core of the US financial system,” said Jeremy Allaire, chair and chief executive officer of Circle.
Even after Friday’s jump, Circle shares are down almost 20 per cent this year. The launch this year of Open USD, a stablecoin backed by traditional finance giants such as Visa, Mastercard and BlackRock, has threatened the primacy of non-traditional crypto-only companies such as Circle.
