Circle Reveals Plan to Transform into a Comprehensive Crypto Bank
Circle, a digital payment startup funded by Goldman Sachs, has formally announced ambitions to transform into a comprehensive nationwide cryptocurrency bank in the United States. Circle co-founder and CEO Jeremy Allaire announced the announcement on Monday, noting that Circle is ready to comply with the regulatory and risk mitigation standards of the Federal Reserve, and other federal agencies such as the US Treasury, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation.
“We think that full-reserve banking, based on digital currency technology, may result in not just a drastically more effective, but also a secure, more robust monetary system,” Allaire said.
Circle’s stablecoin, USD Coin (USDC), is expected to reach “hundreds of billions of dollars in liquidity,” preserving and enhancing elevated economic growth and transforming into a popular instrument in financial services and online commerce applications, according to the CEO.
“Setting up national regulatory criteria for dollar cryptocurrencies, including rules for reserve administration and makeup, is critical to realizing the promise of cryptocurrencies in the real economy,” Allaire said.
Circle is best recognized as the creator of USDC, the world’s second-largest stablecoin in terms of market value behind Tether (USDT). As per CoinGecko information, USDC is the ninth biggest cryptocurrency with a market size of $27.8 billion while writing this article, while USDT has a market cap of almost $63 billion.
Comprehensive reserve banking, as opposed to fractional-reserve banking, mandates banks to retain the entire amount of each depositor’s money in cash and cash equivalents, available for immediate release on request. Full-reserve banking, also referred as 100% reserve banking, is a substitute to a structure in which only a portion of bank deposits are guaranteed by real cash reserves and made available for withdrawal.
The announcement comes soon after Circle submitted a registration document on Form S-4 with the US Securities and Exchange Commission, offering a provisional statement and prospectus in connection with its proposed listing through a merger with blank-check company Concord Acquisition. According to the details of the deal, a new Irish holding company would take over both Concord and Circle and transform into a publicly traded business through listing on the New York Stock Exchange.