Cryptocurrency and payments platform Circle Internet Financial plans to seek a federal banking license and also pursue registration as a brokerage and trading venue with the US Securities and Exchange Commission (SEC), Bloomberg reports.
Circle, which counts Goldman Sachs among its backers, has had preliminary talks with the US Office of the Comptroller of the Currency about obtaining a federal banking license, according to the report.
Meanwhile, the fintech startup is also said to have some contact with staff at the SEC and officials from the Financial Industry Regulatory Authority (FINRA), which oversees brokerages.
Circle, which is headquartered in Boston, is likely to pursue SEC regulation before the banking license, according to the report, which noted that registration with the SEC will allow the platform to sell tokens that are considered securities.
CEO Jeremy Allaire was quoted as saying that with a bank charter, the firm can hold customer assets in the form of digital coins or government-issued currencies like US dollars, while opening doors to other components of the financial system, such as getting native access to the central banking system without intermediaries and directly settling with other banks in other markets worldwide.
That will help “improve the efficiency of what we deliver” and can reduce the costs, he said.
The report noted that while Circle would be subjected to tough scrutiny, getting a banking license will narrow the field of regulators the firm must appease, as federal laws would pre-empt a patchwork of state rules covering crypto.
“You’re able to have a single conversation. It’s hard to have 50 conversations,” Robert Bench, chief compliance officer of Circle told Bloomberg, referring to the move that would help cut down on the number of regulators the platform needed to work with.
Coinbase, another titan of US cryptocurrency trading, announced on Wednesday that it is acquiring a trio of firms including a broker-dealer registered with FINRA.
It will use licenses it obtains to offer customers blockchain-based securities if US regulators give the nod. The cryptocurrency trading platform has also broached the topic of a potential banking license with regulators, according to Bloomberg sources.
– Contact us at [email protected]