According to a Bloomberg report today, CEO of Circle Jeremy Allaire has announced the fintech company’s intentions to become the first cryptocurrency platform in existence to own a federal banking license.
Officials claim they have already engaged with the Office of the Comptroller of the Currency and the SEC to discuss potential banking options including custodial rights to hold securities, including US dollars. The process of becoming a bank is not an easy road, with many fintech companies shying away from the grueling process; Joseph Otting, Comptroller of Currency remarked,
“When they come and they speak to us, and they understand what it really takes to be a bank, they kind of glaze over and often leave skid marks leaving the building.”
If Allaire and his associates can pull it off, it would create a huge advantage for Circle over other digital asset exchanges, by reducing “the field of regulators Circle must appease” in order to do business in the US and will alleviates the platform’s dependency on traditional lenders.
“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”
Circle have asserted their industry experience in digital asset trading will play a vital role in bridging the gap between cryptocurrencies and the traditional financial world; offering themselves as a ‘guinea pig’, to test the complex custodial waters of how to hold intangible cryptocurrencies securely, amidst a rising tide of malicious cyber threats.
Allaire has accepted that the first port of call for Circle will be listing under the SEC as a registered trade venue and brokerage, before applying for a US bank charter. Once this is achieved, the platform will be compliant under the new SEC guidelines to legally trade digital assets that fall under the definition of ‘securities’, including registered ICO assets.