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Circle has announced its plans to obtain federally regulated trust status to manage the company’s stablecoin reserves and expand its custody services for institutional clients. This move aims to streamline compliance ahead of the potential passage of the GENIUS Act, a bill currently making its way through Congress.
The company filed an application with the Office of the Comptroller of the Currency (OCC) to operate as a national trust bank under OCC supervision. If approved, Circle would become the first stablecoin issuer to manage its reserves in a federally regulated institution. This development could have significant implications for the stablecoin market, allowing USDC holders to benefit from more secure and transparent operations.
According to an announcement, CEO Jeremy Allaire stated that this move represents a critical milestone in the company’s goal to build an internet financial system that is transparent, efficient, and accessible to all users. He emphasized the importance of enhancing the reach and resilience of the US dollar by operating market-neutral infrastructure open to global institutions.
The proposed trust bank would hold Circle’s stablecoin reserves, enabling the company to offer crypto custody services for institutional clients such as pension funds, asset managers, and corporate treasurers. This new service would provide these investors with a secure means to securely store their digital assets, further solidifying Circle’s position in the global financial landscape.
The decision comes as no surprise given the growing demand from institutional investors seeking federally regulated custody options for their crypto holdings. As lawmakers continue to debate reserve mandates and disclosure standards, Circle is poised to capitalize on this trend by catering to these clients’ needs while reducing counterparty risk.
Circle, which has recently seen its stock jump over 34% in a single day, aims to further expand its offerings while enhancing compliance ahead of potential regulatory changes.
Source: cryptoslate.com
