Circle Makes Power Play: Files for US Trust Bank Charter After Record $18B IPO

Stablecoin giant Circle just dropped a regulatory bombshell—while Wall Street was still counting its IPO cash.

The crypto-fiat bridge builder slapped a trust bank application on the SEC's desk mere weeks after its $18 billion market debut. Because when you're sitting on that much institutional money, why not double down on banking legitimacy?

Inside the maneuver: This isn't your grandma's banking license. A trust charter lets Circle custody assets without becoming a full-fledged lender—perfect for institutions still skittish about crypto's wild west reputation.

The irony? Traditional banks are simultaneously lobbying against stablecoins while quietly hoarding them. Guess those 'volatile crypto' talking points don't apply when you're earning 5% on USDC reserves.

Circle, the issuer of the USDC stablecoin, has applied for a national trust bank charter with the U.S. Office of the Comptroller of the Currency, marking a significant regulatory milestone following its blockbuster IPO earlier this month that valued the company at nearly $18 billion, Reuters reported exclusively today.

If the charter is granted by the U.S. Office of the Comptroller of the Currency, it would enable Circle to act as a custodian for its own reserves and hold crypto assets on behalf of institutional clients. Unlike traditional banks, the license would not allow Circle to take cash deposits or make loans.

The proposed entity WOULD operate under the name First National Digital Currency Bank, N.A. If approved, Circle would become only the second digital asset company to receive a national trust bank charter, joining Anchorage Digital in this category.

Self-Custody and Institutional Expansion

Currently, Circle's reserves – short-dated U.S. Treasury bills, overnight U.S. Treasury repurchase agreements and cash – are held in custody at BNY and managed by BlackRock. The new charter would allow Circle to manage its own USDC reserves directly, though CEO Jeremy Allaire indicated that some reserves would continue to be held at major banks.

Beyond reserve management, the license would enable Circle to provide custody services for digital assets on behalf of institutional customers. However, Allaire emphasized that the company plans to focus primarily on tokenized traditional assets rather than native cryptocurrencies, Reuters said.

Regulatory Tailwinds

The application comes as Congress moves closer to establishing a comprehensive federal regulatory framework for stablecoins. The Senate passed the bill earlier this month, and the House of Representatives is poised to pass the legislation early this summer. U.S. President Donald TRUMP is expected to sign the bill into law.

If signed into law, the bill would require tokens to be backed by liquid assets and for issuers to publicly disclose the composition of their reserves on a monthly basis. This regulatory clarity could accelerate mainstream adoption of stablecoins among traditional financial institutions and retailers.

Market Positioning

Circle's MOVE reflects the company's strategy to position itself for mainstream institutional adoption. "We're going from the early-adopter phase of this technology into the mainstream," Allaire told Reuters. "As a public company, and now, hopefully if we are successful in getting approval from the OCC as a national trust, that will give us a foundation that the world's leading institutions are going to be comfortable building on".

The regulatory application follows Circle's successful market debut, with Wall Street brokerages beginning coverage of Circle with broadly bullish ratings, although some analysts voiced concerns about its elevated valuation given that the stock has more than doubled since its market debut. Major firms including Barclays, Bernstein, Canaccord Genuity, and Needham launched coverage with buy-equivalent ratings and price targets above $200.

Circle's USDC stablecoin has become a cornerstone of the digital asset ecosystem, used extensively by crypto traders to move funds between different tokens while maintaining dollar parity. The trust bank charter would further cement Circle's position as a bridge between traditional finance and the digital asset economy, particularly as stablecoins gain traction for instant payment applications beyond crypto trading.