In the filing, Circle indicates that as a full reserve national bank, all customer deposits will be backed by its US dollar coin (USDC). In this case, the facility will not lend out its customers’ deposits and can be withdrawn at any time. Circle, which also offers a crypto app and payment services, notes that it has held the highest regulatory standards to ensure that a dollar exchanged into USDC is safe. Circle states that its USDC reserves entail cash, cash equivalents, and other high-quality investment-grade assets issued within the United States.
Circle’s plan to go public
The filing follows the firm’s plan to go public through a special-purpose acquisition company (SPAC). The deal values Circle at $4.5 billion after the firm raised a $440 million funding round. Worth mentioning is that USDC currently has a circulation of over $27.5 billion, and the application significantly impacts the crypto sector. The focus will now be on SEC, considering that the regulator has held strict regulations governing the cryptocurrency sector. Notably, while announcing the filing, Allaire called for streamlining of the regulatory aspect regarding cryptocurrencies. Circle expects banking license approval to spur significant growth in the amount of USDC in circulation. Additionally, the approval aims to push USDC to mainstream users. In the U.S., approval of banking licenses usually takes between 18 months to two years. Therefore, the status of Circle’s application will be known by at least the end of 2022. Featured image via DLDconference YouTube. [coinbase]
