Circle Seeks OCC Approval for National Trust Bank to Manage $62 Billion USDC Reserves

Circle Internet Group, the issuer of the USDC stablecoin, has submitted an application to the Office of the Comptroller of the Currency (OCC) to establish a national trust bank named First National Digital Currency Bank. This strategic move aims to enhance control over its USDC reserves, which currently amount to over $62 billion, and to offer digital asset custody services to institutional clients. The proposed bank would focus on managing USDC reserves and tokenized treasuries, providing on-chain payments under federal oversight, and ensuring compliance with the GENIUS Act.

Circle's application to the OCC is driven by the need to strengthen its USDC infrastructure and reduce reliance on third-party custodians like BlackRock. Currently, the majority of Circle’s stablecoin reserves are managed by BlackRock, which exposes the company to risks and legal uncertainties. By establishing a national trust bank, Circle aims to build a more transparent, efficient, and accessible internet financial system, ensuring legal compliance and minimizing risks.

The OCC has not yet approved Circle’s application. The review process includes a 30-day public comment period and a comprehensive examination of the necessary documentation, business summary, compliance requirements, and global standards. The entire process is expected to take approximately 120 days.

Circle's primary objectives with the national trust bank include managing USDC reserves and tokenized treasuries, offering on-chain payments under federal oversight, and ensuring compliance with the GENIUS Act. The company also plans to focus on the custody of tokenized assets, such as stocks and bonds on blockchain rails, rather than cryptocurrencies like Bitcoin. This aligns with global trends of modernizing traditional markets by integrating blockchain technology.

With over $62 billion in USDC circulation, Circle is a major player in the global digital asset market. The company is actively working to terminate its reliance on third-party custodians and strengthen internal control by minimizing risks and enhancing transparency. This move positions Circle to offer secure custody services to institutions, which is crucial for firms wary of dealing with crypto-native entities.

The establishment of the First National Digital Currency Bank would not only strengthen Circle's position in the stablecoin market but also open new institutional services. With federal approval, Circle could expand its digital asset custody services beyond USDC to include tokenized assets, corporate treasuries, and other blockchain-based financial instruments. This expansion would bridge traditional finance and Web3, potentially serving as a model for other firms pursuing similar licenses globally.

Circle's decision to apply for a federal trust charter comes at a time when investor confidence is surging, following its successful initial public offering (IPO) and the passage of new federal rules for stablecoins. The GENIUS Act provides a regulatory path forward for stablecoins, setting comprehensive guardrails that include 1:1 dollar backing, real-time attestations, and oversight by federal banking regulators. The OCC, under Acting Comptroller Rodney Hood, has signaled support for responsible crypto integration, making Circle's application a well-calculated move.

The impacts of Circle's federally regulated bank could be significant. It would act as connective tissue between crypto and established finance, unlocking channels for pension funds, asset managers, and insurers to engage in digital assets. The bank could also accelerate real-world stablecoin use by supporting tokenized securities, real-time payments, and programmable finance. Partners like Visa, Stripe, and BlackRock are already experimenting with Circle's payment infrastructure, and deeper adoption could follow with OAuth-style plug-and-play modules.

Circle's charter application could pave the way for a new category of federally recognized crypto bank charter holders. Legacy firms like JPMorgan and Bank of America are reportedly working on jointly issuing a stablecoin, and a successful Circle trust bank could validate the model, encouraging competitors to seek their own national trust charter crypto approvals. This move sets a precedent that stablecoins can evolve into bank-grade, regulated infrastructure, benefiting regulators, institutions, and global partners alike.