Here's How a National Trust Charter Could Boost Circle's Stablecoin Ambitions
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If Circle's application is approved, the company would be eligible to act as a custodian for its own reserves as well as hold crypto assets for institutional clients. Circle had one of the most successful IPOs (Initial Public Offering) this year, with its share price rising over 480% from its initial listing price of $31 per share on June 5.
Bank Charter Enhances USDC Framework
Circle is the issuer of the world's second-largest stablecoin, USDC. The company is seeking to create a national trust charter, called First National Digital Currency Bank, N.A., which would enable it to operate as a federally regulated trust institution. The charter would be subject to oversight by the OCC. If approved, the trust bank would oversee the management of the USDC reserve on behalf of Circle's U.S. issuer.
If the OCC approves Circle's application, it would further solidify the issuance and circulation of USDC, the world's largest regulated payment stablecoin. This approval would also enable Circle to offer digital asset custody services to institutional customers. Allaire stated that creating a national digital currency trust bank aligns with the company's goal 'to build an internet financial system that is transparent, efficient, and accessible.'
Moreover, the broader issuance and adoption of U.S. dollar-denominated payment stablecoins will enhance the scale and resilience of the U.S. dollar. Notably, Circle is already poised to benefit from the passing of the GENIUS Act. By becoming a federally regulated trust institution, Circle would be able to meet all the requirements under the proposed Act, which aims to integrate digital assets into the traditional financial system.
Is Circle Stock a Buy, Hold, or Sell?
Analysts remain cautious about Circle's long-term stock trajectory, given that its stock price has already gained significantly since its IPO. On TipRanks, CRCL stock has a Hold consensus rating based on five Buys, five Holds, and two Sell ratings. Also, the average Circle price target of $185.73 implies 2.5% upside potential from current levels.
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