Circle has filed with the Securities and Exchange Commission to become a US Federally-chartered national commercial bank.
The move would see Circle become a full-reserve bank, operating under the supervision and risk management requirements of the Federal Reserve, US Treasury, OCC, and the FDIC.
Circle launched in 2013 as a peer to peer payment network and has subsequently gone on to launch a crypto exchange (Poloniex), a payments service (Circle Pay) and an investment app.
However, most of its focus is now on its USD Coin, which launched in 2018 as a way to convent US dollars into blockchain tokens and digital currency. The stablecoin has become the world's fastest growing dollar digital currency, now standing at $27.5 billion in circulation.
In a blog on the plan to become a "national digital currency bank", CEO Jeremy Allaire says he anticipates that USDC will grow into hundreds of billions of dollars in circulation, supporting trillions of dollars in economic activity and become widely used in financial services and internet commerce applications.
Writes Allaire: "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."
He adds: "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."
Last month Circle announced plans to go public via a Spac deal that values the company at $4.5 billion.
Poloniex, which was spun out of Circle as an independent company in 2019, has found itself in hot water with the SEC which has just fined the business $10 million for operating an unregistered online digital asset exchange. The SEC's action focuses on the timeframe July 2017 to November 2019, until the point of the sale. The SEC claims the exchange sold digital assets that were securities — although the exchange was not registered to do so.