Circle Internet Financial Ltd has revealed that it is currently seeking to obtain a federal banking license with the U.S. Office of the Comptroller of the Currency (OCC) in order to expand the services available to the company’s customers. It also hopes to pursue registration with the U.S. Securities and Exchange Commission (SEC) as a brokerage and trading venue, which would allow the company to facilitate the trading of tokens deemed to comprise securities.
Circle Seeks to Gain Banking License with U.S. Regulator
Circle has announced its intention to become the first cryptocurrency company to obtain a banking license.
If successful, the move would allow Circle to hold customer funds in the form of digital coins of fiat currency, in addition allowing it to “hold reserves with the Federal Reserve, to natively access the central-banking system without intermediaries, to directly settle with other banks in other markets around the world through those networks – that can improve the efficiency of what we deliver, it can reduce the costs,” according to Circle’s chief executive officer, Jeremy Allaire.
Circle claims to have already conducted preliminary conversations with the Office of the Comptroller of the Currency regarding potential banking functions.
Circle to Pursue SEC Licensing
Circle has indicated that it expects to pursue licensing with the SEC as a brokerage and trading venue before applying with the OCC for a banking license. SEC registration would allow Circle to legitimately facilitate trading in cryptocurrency assets deemed to comprise securities.
The company claims to have engaged SEC staff and officials from the Financial Industry Regulatory Authority (Finra). As of this writing, the OCC, SEC, and Finra are all yet to comment publicly regarding Circle’s ambitious intentions.
Lack of Norms Surrounding Custodianship of Cryptocurrency Assets
In seeking a banking licensing, Circle has expressed that it hopes it can shape the practices and standards surrounding holding cryptocurrency assets.
“The regulators need to figure this out because eventually other banks that they regulate are going to want to hold crypto,” Mr. Allaire said. “They’re going to need to have rules for this. We can be a great guinea pig.”
Do you think that we will see more cryptocurrency companies seeking to obtain federal banking licensing? Join the discussion in the comments section below!
Images courtesy of Shutterstock, Wikipedia, Circle Internet Financial Ltd.
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