Circle is willing to operate under the auspices of the Federal Reserve, the United States’ central bank. Treasury, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation, CEO Jeremy Allaire stated.
Circle, a digital payment business sponsored by Goldman Sachs, has announced its intention to become a full-reserve national digital currency bank in the United States.
Circle co-founder and CEO Jeremy Allaire stated on Monday that the company is willing to operate under the supervision and risk management criteria of the Federal Reserve, the United States’ central bank.
Treasury, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation are all part of the Department of the Treasury.
“We believe that full-reserve banking, built on digital currency technology, can lead to not just a radically more efficient, but also a safer, more resilient financial system,” Allaire remarked.
Circle’s CEO stated that the business expects its stablecoin USD Coin (USDC) to reach “hundreds of billions of dollars in circulation,” continuing to support high-trust economic activity and establishing itself as a popular instrument in financial services and internet commerce applications.
“Establishing national regulatory standards for dollar digital currencies is crucial to enabling the potential of digital currencies in the real economy, including standards for reserve management and composition,” Allaire continued.
Circle is well recognised as the creator of USDC, the world’s second largest stablecoin in terms of market value behind Tether (USDT). At the time of writing, USDC had a market size of $27.8 billion, while USDT had a market cap of over $63 billion, according to CoinGecko data.
In contrast to fractional-reserve banking, full-reserve banking mandates banks to maintain the full amount of each depositor’s funds in cash and cash equivalents on hand for immediate withdrawal on demand.
Also referred to as 100% reserve banking, full-reserve banking is a viable alternative to a system in which only a fraction of bank deposits are guaranteed by actual cash on hand and ready for withdrawal.
The announcement comes shortly after Circle filed a registration statement on Form S-4 with the United States Securities and Exchange Commission. Securities and Exchange Commission, submitting a preliminary statement and prospectus in connection with its planned merger with blank-check firm Concord Acquisition.
The arrangement provides for the formation of a new Irish holding company that will acquire both Concord and Circle and will eventually become a publicly traded business listed on the New York Stock Exchange.