Key Takeaways
- Circle is seeking a national trust bank charter to manage its USDC reserves and offer tokenized asset custody.
- The move comes as Congress advances stablecoin legislation expected to be signed into law by President Trump.
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The company’s move follows its June 5 IPO, which gave Circle an initial market cap of around $6 billion. With its stock now trading at $181, the company is currently valued at approximately $44 billion.
The proposed entity, First National Digital Currency Bank, N.A., would enable Circle to directly custody USDC reserves and provide digital asset custody services to institutional clients, though it would not handle cash deposits or lending.
“Establishing a national digital currency trust bank of this kind marks a significant milestone in our goal to build an internet financial system that is transparent, efficient and accessible,” Circle Co-Founder, Chairman and CEO Jeremy Allaire said in a press release.
BlackRock and BNY Mellon currently manage and custody Circle’s USDC reserves. While the new trust bank would take over reserve management, Circle intends to maintain relationships with major banks for portions of its holdings. Allaire indicated the bank would concentrate on tokenized stocks and bonds rather than digital assets like Bitcoin or Ether.
The expansion comes as lawmakers advance legislation regulating stablecoins. The bill, which passed the Senate and is expected to clear the House this summer, would require stablecoins to maintain liquid asset backing and provide monthly reserve disclosures. President Trump is anticipated to sign the measure into law.
Several brokerages initiated coverage of Circle stock this week, with Barclays, Bernstein, and Canaccord issuing bullish ratings and price targets above $200. JPMorgan and Goldman Sachs expressed concerns about the company’s valuation following its post-IPO stock price doubling.
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