Crypto Startup Circle to Seek Banking License in US

Cryptocurrency startup Circle is in talks to become registered in the U.S. as a licensed bank and brokerage, according to a report.

Jun 6, 2018 at 1:35 p.m. UTC
Updated Sep 13, 2021 at 8:01 a.m. UTC

Cryptocurrency startup Circle is seeking to register as a federally licensed bank in the U.S., according to Bloomberg.

In a report published Wednesday, Bloomberg said that alongside the banking license, Circle – which offers a cryptocurrency wallet and investment platform, as well as an OTC crypto trading service – would also seek to register with the Securities and Exchange Commission (SEC) as a brokerage and trading platform.

The move from the Goldman Sachs-backed firm, if successful, would allow it to trade crypto tokens that are considered as securities in the U.S. and would also help it circumvent the complexities of registering as a cryptocurrency firm with regulators in all 50 states.

"You're able to have a single conversation," Circle's chief compliance officer, Robert Bench, told Bloomberg. "It's hard to have 50 conversations."

Following early talks with the Office of the Comptroller of the Currency over the banking registration, as well as with the SEC and the Financial Industry Regulatory Authority, Circles said it would likely seek SEC regulation before moving to apply for the banking license, according to the report.

Jeremy Allaire, Circle's CEO, was quoted as saying in an interview:

"To hold reserves with the Federal Reserve, ... 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."

He added that the firm would also provide regulators with a "great guinea pig" in explorations of regulatory frameworks as Wall Street giants move closer to adopting cryptocurrency.

The ambitious move would seem to align well with Circle's notable aim, as reported by CoinDesk in October 2017, to eventually offer a wide range of digital assets.

"I think what we would be comfortable saying is that digital assets – which are not just digital currencies, but a broader range of assets – it's an area that has grown a lot, but that's not easily accessible to mainstream investors," Allaire told CoinDesk at the time.

Further supporting that aim, Circle acquired the Poloniex exchange in February to build an exchange service that will ultimately offer a host of cryptocurrencies. Sources suggested at the time that the firm put down roughly $400 million for the deal.

Investors are also seeing potential in the firm's widening scope, with Circle closing a $110 million Series E fundraising round in May. Led by China-based mining firm Bitmain, the round saw participation from Accel, Blockchain Capital, Breyer, Digital Currency Group, General Catalyst, IDG, Pantera and Tusk Ventures.

Piggy bank image via Shutterstock

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
What Happened to the Luna Foundation Guard’s Bitcoin Billions?

The community is getting louder about wanting answers to this lingering question.

The community is getting louder about wanting answers to this lingering question.

2
Stronghold Digital Beats Q1 Revenue Estimates, but Misses on Earnings

Shares of the bitcoin miner that uses waste coal for energy fell slightly in after-hours trading.

Shares of the bitcoin miner that uses waste coal for energy fell slightly in after-hours trading.

3
What Is a Consensus Mechanism?

Cryptocurrency and blockchain technology rely on consensus mechanisms to function and be trusted by users.

Cryptocurrency and blockchain technology rely on consensus mechanisms to function and be trusted by users.

4
Market Wrap: Cryptos Mixed as Volatility Fades, Traders Expect Weak Recovery

Bitcoin's average trading volume rose toward its highest level since January, which could point to a brief period of price stabilization.

Bitcoin's average trading volume rose toward its highest level since January, which could point to a brief period of price stabilization.