Please Add Widget from here
Crypto Unicorn Circle Aims to Expand Into Regulated Banking
Altcoin News, Blockchain

Crypto Unicorn Circle Aims to Expand Into Regulated Banking

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

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 evade the complexities of registering as a cryptocurrency firm with regulators in all 50 states.

Circle CEO Jeremy Allaire revealed the firm’s plans during a recent interview with Bloomberg, explaining that it hopes to become the first cryptocurrency startup to receive such licensure at the federal level.

“To hold reserves with the Federal Reserve, to natively access the central-banking system without intermediaries, 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,” Allaire said.

“The regulators need to figure this out because eventually other banks that they regulate are going to want to hold crypto,” he added. “They’re going to need to have rules for this. We can be a great guinea pig.”

Federal banking licenses preempt state-level regulations, enabling firms that have them to operate throughout the US under a single set of guidelines. They also allow firms to provide FDIC-insured accounts to their customers directly, eliminating the need to find a banking partner, which is often a quite difficult process for companies that facilitate cryptocurrency trades.

 

Consequently, multiple cryptocurrency companies like Coinbase have reportedly approached regulators about pursuing federal banking licenses.

However, national banking charters also subject registrants to much more regulatory oversight, which is why many fintech startups prefer to deal with the patchwork of state-level rules after learning about how arduous the process is to register at the federal level.

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.

Comments are off this post!