Crypto Startup Circle to Seek Banking License in US
Originally published on: CoinDesk
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June 06, 2018
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.
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