Stablecoin issuer Circle surged after the U.S. Office of the Comptroller of the Currency, or OCC, on Friday granted it permission to operate as a trust bank, the company said.
The company’s shares were below their previous highs, but up 5%.
The approval gives the company the ability to directly manage the reserves of its regulated stablecoins, primarily the USDC stablecoin, which has over $73 billion in circulation. The new bank will operate under the name Circle National Trust. Previously, Circle required banks and third-party custodians to hold the liquidity and Treasury assets backing USDC.
The charter does not allow Circle to operate as a commercial bank that accepts deposits and makes loans.
The news reflects a broader trend in the crypto industry, where companies are trying to move from a financial application to a financial infrastructure. Recent OCC actions have included approvals or requests for Coinbase, BitGoFidelity Digital Assets, Ripple and Paxos, reflecting the race to own a larger share of the regulated financial stack.
The trust structure can also simplify regulatory requirements for international counterparties, Dante Disparte, Circle’s chief strategy officer, told CNBC.
“We see ourselves as pioneers in ensuring that even from the early days of stablecoins entering the commercial flow, they meet standards of trust, transparency, security, financial crime compliance and the rest,” he said. “Today’s announcement codifies this at the federal level.”
The charter also gives Circle a national banking regulator, rather than being subject to state regulation – a major problem for fast-paced startups operating in the heavily regulated financial services industry. Instead of a single regulation, businesses regularly face 50 slightly different rules that can not only slow growth, but also increase costs.
The race for stablecoins has intensified since the passage of the GENIUS Act almost a year ago, which established a federal framework for payment stablecoins. Under this law, large stablecoin issuers like Circle are required to obtain an OCC charter.
As a result, traditional financial companies are increasingly interested in issuing their own stablecoins – posing a growing competitive challenge for USDC – because they can capture payment flows, deepen customer relationships, and build financial services on programmable digital dollars rather than relying on third-party issuers like Circle.
The approval of the OCC charter comes on the same day. Global Financial Messaging Network Swift launched a blockchain consortium with 17 banksincluding Citi and HSBC, as part of a 24/7 payments campaign to help it compete in the stablecoin race.
Also in June, a consortium of more than 140 companies, including Blackrock, Coinbase, Mastercard, Stripe and Visa, joined the group. new Open USD (OUSD) stablecoin effortwhere reserve yields are distributed to participating partners rather than a single issuer.
The OCC did not respond to a request for comment from CNBC.