Circle is willing to operate under the supervision of the Federal
Reserve, the U.S. Treasury, the OCC and the FDIC, CEO Jeremy Allaire
said.
Goldman Sachs-backed digital payment company Circle has officially
disclosed plans to become a full-reserve national digital currency bank
in the United States.
Announcing the news on Monday, Circle co-founder and CEO Jeremy Allaire
noted that Circle is willing to operate under the supervision and risk
management requirements of the Federal Reserve, the U.S. Treasury, the
Office of the Comptroller of the Currency and the Federal Deposit
Insurance Corporation.
“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 stated.
The CEO added that Circle anticipates the company’s stablecoin, USD Coin (USDC),
will grow to “hundreds of billions of dollars in circulation,”
continuing to support high-trust economic activity and becoming a
popular tool 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
added.
Circle is known as the principal developer of USDC, the
world’s second-largest stablecoin by market capitalization after Tether (USDT).
At the time of publication, USDC is the eighth largest cryptocurrency
with a market value of $27.8 billion, while USDT holds nearly a $63
billion market cap, according to data from CoinGecko.
In
contrast to fractional-reserve banking, full-reserve banking requires
banks to keep the full amount of each depositor’s funds in cash and cash
equivalents, ready for instant withdrawal on demand. Also known as 100%
reserve banking, full-reserve banking provides an alternative to a
system in which only a fraction of bank deposits are backed by actual
cash on hand and available for withdrawal.
Related: Jeremy Allaire: ‘USDC is halfway to flipping PayPal’
The news comes shortly after Circle filed
a registration statement on Form S-4 with the U.S. Securities and
Exchange Commission, providing a preliminary statement and prospectus
regarding its planned listing through a merger with blank-check firm
Concord Acquisition. Under the terms of the agreement, a new Irish
holding company will acquire both Concord and Circle and become a publicly traded company that is expected to be listed on the New York Stock Exchange.
source link : https://cointelegraph.com/news/circle-plans-to-become-a-full-reserve-national-digital-currency-bank
