Circle, the company behind USDC, a digital currency tied to the U.S. dollar, has sought to become a federally licensed national commercial bank with the U.S. Securities and Exchange Commission.
In a regulatory filing on Monday, August 9, Circle Payments and Digital Currency said that it plans to apply for a national bank charter to bring some of its payment processing services in-house.
According to the filing statement, Circle’s key services, such as payment processing and wallets, largely rely on third parties, posing business concerns. As a result, Circle believes that pursuing a banking charter or purchasing an existing national bank might be a viable option.
“As part of our strategy to reduce our dependence on third parties, we may in the future consider pursuing a U.S. national bank charter or evaluate the acquisition of a national bank. This would allow us to access the Federal Reserve System directly, reducing the costs and time for settling transactions.”
Circle’s blockchain-based services, according to the petition, rely on the Algorand and Ethereum blockchains. According to the document, Circle’s traditional payment infrastructure is based on its partnerships with financial institutions, which “sponsor” the company into multiple payment networks.
Circle Is Trying to Grow Its Business
Circle announced intentions to go public on July 9 combined with Concord Acquisition Corporation, a special purpose acquisition business. The filing on Monday was a proxy statement for Concord’s shareholders to vote on whether or not to approve the public acquisition.
Circle had just raised $440 million in investment from Willett Advisors, Fidelity, and Marshall Wace, and the deal valued the company at $4.5 billion.
Jeremy Allaire Circle, CEO of Circle, stated that the company is taking a bigger step forward by acquiring the relationships and capital needed to develop a global-scale internet financial services firm that can help businesses everywhere connect into a more effective, inclusive, and open global economic system through such strategic transactions and the ultimate public debt.
The urge to go public, according to Allaire, stemmed from the USDC stablecoin’s development over the preceding year.
According to Allaire, Circle saw a great potential to raise funds and establish a large public company with openness and visibility to the institutions and companies built on top of it. Moreover, according to Allaire, the more openness brought by going public might help to alleviate concerns about stablecoins.
According to CoinMarketCap.com, USDC is the eighth-largest cryptocurrency by market capitalization and the second-largest stablecoin, with a market valuation of $26 billion, behind Tether USDT’s $62 billion.