Circle Will Apply for US Bank Charter Soon, CEO Confirms
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Circle, the issuer of the second-largest USD-pegged stablecoin
Stablecoin
Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including gold, silver, or others. Advantages of StablecoinsOf note, stablecoins redeemable in currency, commodities, or fiat money are also said to be backed, whereas those tied to an algorithm are not considered to be so.There are several advantages of asset backed crypto. First, these coins are stabilized by assets that fluctuate outside of the crypto space, that is. This can help mitigate the financial risk associated with these assets.For example, Bitcoin and altcoins are highly correlated, so that cryptocurrency holders cannot escape periodic price falls. Stablecoins control for this vulnerability, allowing for the diversification of risk in a portfolio.Stablecoins also possess a mechanism for redeeming the asset backing them. This grants an additional level of confidence associated with the coin and are unlikely to drop below the value of the underlying physical asset, due to the effects such as arbitrage.For example, fiat-pegged coins are coins that are tied to a specified amount of fiat currency, usually on a one-to-one ratio (i.e.1 StablecoinX = $1). The companies that issue these currencies must have fiat reserves in the equivalent amount of the stablecoins they have issued.Crypto-pegged stablecoins constitute coins that are tied to a specified amount of another cryptocurrency, such as Bitcoin or Ethereum. Algorithmic stablecoins use supply-and-demand to automatically maintain a stable value.
Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including gold, silver, or others. Advantages of StablecoinsOf note, stablecoins redeemable in currency, commodities, or fiat money are also said to be backed, whereas those tied to an algorithm are not considered to be so.There are several advantages of asset backed crypto. First, these coins are stabilized by assets that fluctuate outside of the crypto space, that is. This can help mitigate the financial risk associated with these assets.For example, Bitcoin and altcoins are highly correlated, so that cryptocurrency holders cannot escape periodic price falls. Stablecoins control for this vulnerability, allowing for the diversification of risk in a portfolio.Stablecoins also possess a mechanism for redeeming the asset backing them. This grants an additional level of confidence associated with the coin and are unlikely to drop below the value of the underlying physical asset, due to the effects such as arbitrage.For example, fiat-pegged coins are coins that are tied to a specified amount of fiat currency, usually on a one-to-one ratio (i.e.1 StablecoinX = $1). The companies that issue these currencies must have fiat reserves in the equivalent amount of the stablecoins they have issued.Crypto-pegged stablecoins constitute coins that are tied to a specified amount of another cryptocurrency, such as Bitcoin or Ethereum. Algorithmic stablecoins use supply-and-demand to automatically maintain a stable value.
Read this Term, is inching closer to applying for a United States banking charter, Chief Executive Officer Jeremy Allaire revealed in a recent interview with Bloomberg.
Though Allaire did not specify the exact day or time of the upcoming application submission, he said that it would be “hopefully in the near future.”
Ambitions to Become a Crypto Bank
Circle has become a major cryptocurrency company over the years. Its intention to become a crypto bank is not new as it first disclosed its plans last August. Allaire further revealed that the company is in talks with regulators since.
It has discussed a range of topics with the Office of the Comptroller of the Currency including the management structure of the banking division of the company. The regulator was particularly interested in the interoperability of the blockchains and the assessment of operational risks.
Meanwhile, Circle is also in the process of listing its shares publicly on an American stock exchange. It has already inked a deal with a blank-check company and received a valuation of $9 billion.
Now, it will be one of the very few crypto banks in the United States if it successfully gains the banking charter. Only three other crypto companies, Anchorage Digital, Protego Trust Bank NA and Paxos Trust Company, have obtained at least a preliminary approval for a charter. However, a few other crypto firms have secured state charters.
But the OCC, which oversees the federal banking charter, did not issue any approval for any crypto companies for more than a year now.
“They’ve been doing a lot of work laying the groundwork for how they’re going to supervise crypto, how they’re going to supervise stablecoin issuers specifically,” Allaire added.
Circle, the issuer of the second-largest USD-pegged stablecoin
Stablecoin
Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including gold, silver, or others. Advantages of StablecoinsOf note, stablecoins redeemable in currency, commodities, or fiat money are also said to be backed, whereas those tied to an algorithm are not considered to be so.There are several advantages of asset backed crypto. First, these coins are stabilized by assets that fluctuate outside of the crypto space, that is. This can help mitigate the financial risk associated with these assets.For example, Bitcoin and altcoins are highly correlated, so that cryptocurrency holders cannot escape periodic price falls. Stablecoins control for this vulnerability, allowing for the diversification of risk in a portfolio.Stablecoins also possess a mechanism for redeeming the asset backing them. This grants an additional level of confidence associated with the coin and are unlikely to drop below the value of the underlying physical asset, due to the effects such as arbitrage.For example, fiat-pegged coins are coins that are tied to a specified amount of fiat currency, usually on a one-to-one ratio (i.e.1 StablecoinX = $1). The companies that issue these currencies must have fiat reserves in the equivalent amount of the stablecoins they have issued.Crypto-pegged stablecoins constitute coins that are tied to a specified amount of another cryptocurrency, such as Bitcoin or Ethereum. Algorithmic stablecoins use supply-and-demand to automatically maintain a stable value.
Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including gold, silver, or others. Advantages of StablecoinsOf note, stablecoins redeemable in currency, commodities, or fiat money are also said to be backed, whereas those tied to an algorithm are not considered to be so.There are several advantages of asset backed crypto. First, these coins are stabilized by assets that fluctuate outside of the crypto space, that is. This can help mitigate the financial risk associated with these assets.For example, Bitcoin and altcoins are highly correlated, so that cryptocurrency holders cannot escape periodic price falls. Stablecoins control for this vulnerability, allowing for the diversification of risk in a portfolio.Stablecoins also possess a mechanism for redeeming the asset backing them. This grants an additional level of confidence associated with the coin and are unlikely to drop below the value of the underlying physical asset, due to the effects such as arbitrage.For example, fiat-pegged coins are coins that are tied to a specified amount of fiat currency, usually on a one-to-one ratio (i.e.1 StablecoinX = $1). The companies that issue these currencies must have fiat reserves in the equivalent amount of the stablecoins they have issued.Crypto-pegged stablecoins constitute coins that are tied to a specified amount of another cryptocurrency, such as Bitcoin or Ethereum. Algorithmic stablecoins use supply-and-demand to automatically maintain a stable value.
Read this Term, is inching closer to applying for a United States banking charter, Chief Executive Officer Jeremy Allaire revealed in a recent interview with Bloomberg.
Though Allaire did not specify the exact day or time of the upcoming application submission, he said that it would be “hopefully in the near future.”
Ambitions to Become a Crypto Bank
Circle has become a major cryptocurrency company over the years. Its intention to become a crypto bank is not new as it first disclosed its plans last August. Allaire further revealed that the company is in talks with regulators since.
It has discussed a range of topics with the Office of the Comptroller of the Currency including the management structure of the banking division of the company. The regulator was particularly interested in the interoperability of the blockchains and the assessment of operational risks.
Meanwhile, Circle is also in the process of listing its shares publicly on an American stock exchange. It has already inked a deal with a blank-check company and received a valuation of $9 billion.
Now, it will be one of the very few crypto banks in the United States if it successfully gains the banking charter. Only three other crypto companies, Anchorage Digital, Protego Trust Bank NA and Paxos Trust Company, have obtained at least a preliminary approval for a charter. However, a few other crypto firms have secured state charters.
But the OCC, which oversees the federal banking charter, did not issue any approval for any crypto companies for more than a year now.
“They’ve been doing a lot of work laying the groundwork for how they’re going to supervise crypto, how they’re going to supervise stablecoin issuers specifically,” Allaire added.
Cryptocurrency
