USDC Developer Circle Plans to Become a Full-Reserve National Commercial Bank

USDC Developer Circle Plans to Become a Full-Reserve National Commercial Bank
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USDC developer Circle has announced its plans to become a full-reserve US federally-chartered national commercial bank.

According to a company update by Circle CEO and co-founder Jeremy Allaire on Monday, August 9, the company is setting out to become a US federally-chartered national commercial bank, operating under the supervision and risk management requirements of the Federal Reserve, U.S. Treasury, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC).

Circle, a Boston-based digital payment company, is the principal developer of USD Coin (USDC), the world’s second-largest stablecoin with a market capitalization of more than $27 billion after Tether (USDT). The company launched the stablecoin in partnership with Coinbase and through the Centre Consortium in September 2018.


According to Jeremy Allaire, as “USDC has grown to become an important infrastructure for the new digital currency enabled financial system,” Circle is ready to contribute its part in building a safer financial system.  He wrote:

“We believe that full-reserve banking, built on digital currency technology, can lead to not just a radically more efficient, but also a safer, more resilient financial system.”

Jeremy added:

“In the coming years, we anticipate that USDC will grow into hundreds of billions of dollars in circulation, continue to support trillions of dollars in low-friction, high-trust economic activity, and become widely used in financial services and internet commerce applications.  Establishing national regulatory standards for dollar digital currencies is crucial to enabling the potential of digital currencies in the real economy, including standards for reserve management and composition.”

Circle will be a full-reserve bank. Full reserve banking requires banks to keep the full amount of each depositor’s funds in cash and cash equivalents, ready for instant withdrawal on demand. The commercial banking sector uses the Basel III standard to ensure liquidity in high-stress times and mandates that banks maintain their Liquidity Coverage Ratio (LCR) above 100%. Jeremy said that Circle had always exceeded, and would continue to exceed, the bank-grade LCR requirements under Basel III.

The announcement follows the Circle’s announcement to become a public-traded company on New York Stock Exchange (NYSE). For this, Circle has file Form S-4 with the US SEC regarding its planned listing through a merger with Concord Acquisition Corp, a publicly traded special purpose acquisition company. A new Irish holding company will acquire both Concord and Circle and become a publicly traded company that is expected to be listed on the New York Stock Exchange (NYSE) under the ticker CRCL.

As reported, Mastercard has also recently partnered with Circle to use USDC to facilitate crypto-to-fiat conversions in a pilot program that will test USDC as a means for card issuers to more easily settle payments to Mastercard.

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