Goldman Sachs-backed crypto payments group Circle aims to become a full-reserve national digital bank

Goldman Sachs-backed crypto payments group Circle aims to become a full-reserve national digital bank
Circle Chesnot
  • Digital payments company Circle said on Monday it planned to operate as a digital full-reserve commercial bank.
  • CEO Jeremy Allaire said full-reserve banking and digital currency technology would help make the financial system more resilient.
  • The company's USDC stablecoin, the second-biggest after Tether, has a market value of $27.5 billion.

Digital payments company Circle plans to become a full-reserve national commercial bank, according to an announcement by CEO Jeremy Allaire on Monday.

Allaire said that since its inception, the aim of Circle was to eventually build a global digital currency bank, regulated in the same way as traditional commercial banks and held to the same standards, but with free and "frictionless" transaction and payment mechanisms.

"We believe that full-reserve banking, built on digital currency technology, can lead to not just a radically more efficient, but also a safer, more resilient financial system," Allaire said in a blog post.

"Since Circle's founding, we have prioritized responsible financial services innovation and constructive engagement with regulators and public authorities in the US and around the world," he said.

The company said it would work under the supervision of bodies such as the Federal Reserve, the Treasury Department, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation.


Allaire said the decision had partly been the product of the growth in its dollar-backed stablecoin, USDC, which has a market capitalization of $27.5 billion. It's the second-largest stablecoin after Tether, according to Circle partnered with Visa in late 2020 to allow USDC payments on its cards, for example.

Stablecoins such as USDC and Tether are backed by traditional assets such as fiat currencies, or even short-dated government bonds. Their detractors point to a lack of transparency over reserve levels and how much their issuers have in hard assets to back their coins. But their supporters point to their stability compared with other, riskier cryptocurrencies that can by highly volatile.

Circle, which is partly backed by Goldman Sachs, said it would continue to build on its "long-standing commitment to trust, transparency and accountability in the dollar-denominated reserves backing USDC."

"In the coming years, we anticipate that USDC will grow into hundreds of billions of dollars in circulation, continue to support trillions of dollars in low-friction, high-trust economic activity and become widely used in financial services and internet commerce applications," Allaire said.