Stablecoin issuer Circle experienced a notable increase following the announcement that the U.S. Office of the Comptroller of the Currency, or OCC, granted it approval on Friday to operate as a trust bank, according to the company. Shares of the company experienced a decline from their earlier highs but concluded the day with an increase of nearly 5%. The approval grants the company the capacity to directly manage reserves for its regulated stablecoins, with a primary focus on the USDC stablecoin, which boasts over $73 billion in circulation. The new bank will operate under the name Circle National Trust. Previously, Circle relied on third-party banks and custodians to manage the cash and Treasury assets that underpin USDC. The charter does not authorise Circle to function as a commercial bank that accepts deposits and extends loans.

The news reflects a broader trend in the crypto industry, where companies are attempting to transition from being financial applications to establishing themselves as financial infrastructure. Recent actions by the OCC have encompassed approvals or applications from Coinbase, BitGo, Fidelity Digital Assets, Ripple, and Paxos, illustrating the competitive landscape to dominate the regulated financial framework. The trust structure can also simplify regulatory requirements for international counterparties, as noted by Dante Disparte. “We think of ourselves as a pioneer in ensuring that — even from the very earliest days of stablecoins entering the stream of commerce — they ought to follow the norms for trust, transparency, safety, financial crime compliance and the rest,” he said. “Today’s announcement codifies that at the federal level.”

The charter also provides Circle with a national bank regulator, as opposed to being governed by state-based regulation – a significant challenge for rapidly evolving startups operating within the heavily regulated financial services sector. Rather than adhering to a singular regulatory framework, firms frequently encounter approximately 50 distinct variations. This multiplicity not only hampers growth but also escalates expenses. The competition among stablecoins has intensified following the enactment of the GENIUS Act nearly a year ago, which created a federal framework for payment stablecoins. Under that law, large stablecoin issuers such as Circle are mandated to secure an OCC charter. Consequently, traditional financial institutions are progressively inclined to issue their own stablecoins, creating an escalating competitive threat for USDC.

This strategy allows them to seize payment flows, enhance customer relationships, and develop financial services utilising programmable digital dollars, rather than depending on third-party issuers such as Circle. The OCC charter approval coincides with the launch of a blockchain consortium by global financial messaging network Swift, which includes 17 banks such as Citi and HSBC. This initiative aims to enhance 24/7 payments and strengthen its position in the competitive stablecoin landscape. In June, a consortium comprising over 140 companies — among them Blackrock, Coinbase, Mastercard, Stripe, and Visa — became involved in the new Open USD stablecoin initiative, which allocates reserve yields to participating partners instead of a sole issuer.