Stablecoin Firm Circle Has Been Approved to Operate as a Bank

Stablecoin issuer Circle’s shares rose more than 7% on Friday after the U.S. Office of the Comptroller of the Currency (OCC) approved the company to operate a national trust bank, allowing it to manage reserves backing its regulated stablecoins directly.

The new entity, Circle National Trust, will oversee reserves for the company’s U.S. dollar-pegged USDC stablecoin, which has more than $73 billion in circulation. Previously, Circle relied on third-party banks and custodians to hold the cash and U.S. Treasury assets backing USDC.

The OCC approval does not allow Circle to operate as a commercial bank that accepts deposits or makes loans.

The approval marks another step in the crypto industry’s push to become part of the regulated financial infrastructure rather than simply offering financial applications. Companies including Coinbase, BitGo, Fidelity Digital Assets, Ripple and Paxos have also sought or received approvals from the OCC as digital asset firms seek greater regulatory oversight and integration with the traditional financial system.

The charter also places Circle under a single national banking regulator instead of a patchwork of state regulators, a shift that could simplify compliance and reduce operating costs.

The approval comes as competition in the stablecoin market intensifies following the passage of the GENIUS Act, which established a federal regulatory framework for payment stablecoins in the United States.

The clearer regulatory environment has encouraged banks and traditional financial firms to explore issuing their own stablecoins, increasing competitive pressure on Circle’s USDC by allowing institutions to retain payment flows and build services around their own digital dollars instead of relying on third-party issuers.

The OCC’s decision coincides with broader efforts by established financial institutions to expand into blockchain-based payments. On Friday, global financial messaging network Swift launched a blockchain consortium with 17 banks, including Citi and HSBC, aimed at enabling around-the-clock payments as competition with stablecoin networks grows.

Last month, a consortium of more than 140 companies, including BlackRock, Coinbase, Mastercard, Stripe and Visa, also backed the Open USD (OUSD) stablecoin initiative, under which reserve yields are shared among participating partners rather than accruing to a single issuer.

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