Circle secures OCC trust bank approval as stablecoin volumes hit $1.79 trillion

Circle Internet Group received final approval from the Office of the Comptroller of the Currency to establish a national trust bank named First National Digital Currency Bank, the company said July 10. The charter allows Circle to operate as a federally regulated bank, with USDC reserve management planned for a later phase.

The OCC granted the approval under the National Bank Act, allowing Circle to hold customer deposits in a federally regulated trust structure. Stablecoins are cryptocurrencies whose value is pegged to the US dollar and backed by reserve assets — Circle's USDC maintains its peg through a portfolio of cash and short-term Treasury bonds. The approval follows the OCC's 2021 interpretive letter that clarified national banks could custody crypto assets, indicating a gradual shift toward federal recognition of digital asset firms.

The approval comes as stablecoin usage reaches record levels globally. Transaction volume hit $1.79 trillion in June, according to Visa data, as more traditional financial institutions explore integrating digital dollar infrastructure. British multinational bank Standard Chartered and Circle recently developed a system enabling institutional clients to mint and redeem USDC directly through the bank's platform, bypassing the need for separate accounts with Circle.

Congress weighs stablecoin rules

Congressional progress on the CLARITY Act, which would establish the first federal regulatory framework for digital assets in the US, remains stalled. Galaxy Digital cut its odds of the bill becoming law in 2026 to 50 percent, with head of research Alex Thorn warning the legislation may not have enough floor time before the Senate's August recess.

The GENIUS Act, a separate bill establishing a federal framework for stablecoins, is also moving through Congress. Both bills face pushback from Democrats and the banking industry over concerns that crypto firms could offer yield-bearing stablecoin products without facing the same requirements as traditional financial institutions. JPMorgan CEO Jamie Dimon told Fox Business in May that banks will continue to "fight" against the current version of the CLARITY Act. More than 200 crypto companies urged the Senate to pass the bill in a letter shared by lobby group Stand With Crypto.

Competition intensifies among issuers

Circle's federal charter places it alongside Paxos and other firms that have received US regulatory approval to establish trust bank structures tied to stablecoins. Japanese conglomerate Sony also received approval to establish a $40 million US trust bank subsidiary for dollar-denominated stablecoin issuance, with plans to eventually issue its own stablecoin for use in video games and anime payments.

USDC, the second-largest stablecoin by market capitalization, competes directly with Tether's USDT, which dominates the market with a supply of more than $110 billion. Circle's banking charter may give it a regulatory advantage in attracting institutional clients who require federally regulated custody and reserve management.

The OCC's approval sets a precedent for other crypto firms seeking federal banking charters and could accelerate the integration of stablecoins into the traditional financial system. With multiple regulatory frameworks under consideration in Congress and growing interest from traditional banks, the stablecoin market is expected to undergo structural change in the coming year.

This article is for informational purposes only and does not constitute investment advice.