The Regulatory Race to the Fed: How Wise and Circle Are Redefining Fintech Leadership

The U.S. financial system is undergoing a quiet revolution as fintech firms like Wise and Circle push to integrate deeper into the nation's payment infrastructure. Their pursuit of national trust bank charters from the Office of the Comptroller of the Currency (OCC) marks a pivotal shift in how technology-driven firms are leveraging regulatory modernization to reduce costs, compete with legacy banks, and position themselves as cornerstones of a digitized dollar economy. For investors, this regulatory tailwind—often underappreciated in stock valuations—is a signal to capitalize on a structural shift in financial innovation.

The Strategic Play for Fed Access

Both Wise and Circle have made clear their ambition to bypass intermediaries and plug directly into the Federal Reserve's payment systems. For Wise, a London-based payments giant with over 450 employees in Austin, Texas, this move aims to solidify its U.S. footprint. Its June 16, 2025, OCC application seeks a national trust bank charter, which—if approved—would grant it direct access to Fedwire and the Continuous Linked Settlement system. This would eliminate reliance on correspondent banks for cross-border transactions, potentially slashing costs by up to 30% for customers.

Circle, issuer of the USD Coin (USDC), is taking a parallel path. Its proposed “First National Digital Currency Bank” would centralize USDC reserve management under OCC supervision, aligning with the pending GENIUS Act. This legislation, nearing House approval, would mandate stablecoin issuers to hold reserves at regulated institutions. By preemptively seeking a federal charter, Circle is hedging against regulatory uncertainty while future-proofing its $60 billion stablecoin's legitimacy.

Why Regulators Are Greenlighting This Shift

The OCC's recent actions reveal a deliberate strategy to modernize banking for the digital age. In June 2025, Acting Comptroller Rodney Hood exempted banks from certain Customer Identification Program (CIP) rules, allowing third-party TIN verification—a nod to fintech's need for streamlined compliance. The OCC's Spring 2025 risk report also prioritized “innovation-friendly” frameworks while addressing cybersecurity and anti-money laundering risks.

This regulatory support is critical. A national charter grants firms like Wise and Circle the ability to operate nationwide without costly state-by-state licenses. For Wise, this could accelerate its push to list shares in the U.S., while Circle's charter would let it offer institutional custody services, expanding beyond its retail-focused origins.

The Cost-Efficiency Tipping Point

The real prize lies in transaction cost reduction. Direct Fed access eliminates the fees and delays tied to intermediaries, a boon for remittance firms like Wise and stablecoin issuers like Circle. Consider the math: cross-border payments today average 6.5% in fees (World Bank), but with Fed-level efficiency, this could drop to 2-3%. For USDC, which already processes $30 billion weekly, lower costs could attract institutional adoption, boosting liquidity and network effects.

Risks and the Case for Investment

Skeptics argue that OCC approvals could face delays or scrutiny over systemic risk. Indeed, the OCC's June 27, 2025, appointment of a receiver for Santa Anna National Bank underscores lingering concerns about banking stability. Yet, the strategic alignment of these firms with regulators—Circle's public advocacy for the GENIUS Act, Wise's emphasis on financial inclusion—suggests they're navigating risks proactively.

For investors, the underappreciated angle is that these charters are not just about cost cuts but about market control. A direct Fed connection could let Wise undercut legacy banks in remittances, while Circle's charter could cement USDC as the default stablecoin for institutional payments. Both firms trade at P/E ratios below their fintech peers (Wise: 18x vs. PayPal's 22x; Circle: 15x vs. Square's 25x), offering a margin of safety.

Conclusion: Regulatory Tailwinds Are the New Infrastructure

Wise and Circle are betting that regulatory modernization—not just technology—will define the next era of fintech. Their OCC applications are not merely defensive moves but offensive plays to own the rails of the digital dollar economy. For investors, this is a call to look beyond short-term stock fluctuations and recognize that the firms best positioned to navigate regulatory clarity will dominate the $1.8 trillion global payment services market. The Fed's gates are opening; the question is whether investors will follow.

Investment Thesis:
- Wise (WISE): Buy on dips below $15/share, targeting $20 within 12 months as its charter application gains traction.
- Circle (CRCL): Accumulate on weakness, with a long-term view of $12/share as USDC's institutional adoption accelerates under OCC oversight.
- Watch for: OCC approval timelines (expected Q4 2025), GENIUS Act passage, and Fedwire integration milestones.

The race to the Fed isn't just about speed—it's about redefining what money can do.