Circle has announced new ambitious plans: the financial giant plans to become the “national bank for digital currencies”. That is, Circle should be directly subordinate to the US Federal Reserve and other government agencies involved in financial transactions.
Thus, the developer of the second most popular stablecoin, USDC; wants to work with all the necessary requirements and approvals from the financial industry regulators. The firm published a document according to which the banking structure can reduce the risks associated with its business; including its dependence on third-party payment systems.
Circle CEO Jeremy Allaire says the company will be able to create a global digital currency bank that will provide hassle-free; instant and near-free payments that combine fiat reserve currencies with public ones. He also notes that this will ultimately be the development of open networks to support new forms of capital accumulation and intermediation, without blockchain permissions.
Circle’s plans for the future of USDC stablecoin
Circle CEO Jeremy Allaire said the move to direct banking in the customer service business will strengthen the company’s USDC stablecoin.
Circle currently operates under government money transfer regulations. They are less stringent than those required by national banks.
The company notes that the work is being carried out along with the efforts of the leading US financial regulators. They, through the President’s Financial Markets Working Group; are seeking to better manage the risks and opportunities of large-scale private sector digital currencies.
Accordingly, representatives of the company consider the digital assets industry very promising; however, they understand that the characteristics of a niche, such as sharp changes in exchange rates, can frighten off newcomers. Therefore, they want to limit the risks to their future users, which explains the desire to work more widely.
Circle will work with its national regulators to finalize commercial implementation of the new dollar digital currency standards. With regard to the USDC stablecoin, Circle expects it to be in demand over time; billions of dollars in circulation, and support for trillions of dollars in economic activity.
It is worth noting that stablecoin was developed taking into account the requirements of regulators. Launched just three years ago; Circle reports, USDC has grown into an essential infrastructure for a new digital currency-backed financial system. From the outset, Circle partnered with Coinbase and through the Center Consortium to develop the USDC to meet strict US remittance oversight and regulation standards.
Circle’s new move will improve the reputation of the coin niche
For the cryptocurrency industry, Circle’s entry to players of this size will be unambiguously positive. Now the company’s stablecoin is one of the most popular among crypto investors, and the very stability of Bitcoin and other digital assets depends on its stable position in the eyes of regulators. Note that this is not the first time that cryptocurrency companies have been thinking about the prospects of becoming a bank. For example, in September 2020, the Kraken trading platform received a license to create its own bank in the United States. In the future, she will be able to store digital assets on behalf of clients, as well as pay them salaries in cryptocurrencies.