Crypto Giant Circle Seeks a US Banking License
Circle is currently in talks with the US regulators looking forth to pursue a federal banking license and also to have themselves registered as a securities exchange.
Circle CEO Jeremy Allaire mentions his firms plans recently stating that he hopes to make it become the first ever cryptocurrency start up to receive such kind of a licensure from the federal level.
He said, “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.” Adding later on that, “The regulators need to figure this out because eventually other banks that they regulate are going to want to hold crypto. They’re going to need to have rules for this. We can be a great guinea pig.”
Federal banking licenses allow firms to provide directly to their customers FDIC-insured accounts, thereby eliminating the need to help find a banking partner which in most cases is one of the hardest and difficult processes for companies that help in facilitating cryptocurrency trades. Also, these licenses pre-empt the state level regulations; this allows the firms to operate under a single set of rules and guidelines throughout the US.
At an industry conference earlier this year, the Comptroller of the Currency Joseph Otting stated, “Most fintechs come to us because they have heard of this thing called a national banking charter that gives them pre-emption across state lines. 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.”
Nevertheless, Circle looks at this in the long term and says that the benefits are all worth the efforts. Circle’s chief compliance officer, Robert Bench said that, “You’re able to have a single conversation. It’s hard to have 50 conversations.”