Circle, the Goldman Sachs-backed digital payment company, has planned to become a full-reserve national digital currency bank in the United States.
It has been reported that Circle co-founder and CEO Jeremy Allaire noted that Circle is willing to operate under the supervision and risk management requirements of the Federal Reserve, the US Treasury, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation.
Allaire stated:
“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.”
However, he added that Circle anticipates the company’s stablecoin, USD Coin (USDC), will grow to “hundreds of billions of dollars in circulation,” continuing to support high-trust economic activity and becoming a popular tool in financial services and internet commerce applications.
He further said:
“Establishing national regulatory standards for dollar digital currencies is crucial to enabling the potential of digital currencies in the real economy, including standards for reserve management and composition.”
The report said that in contrast to fractional-reserve banking, full-reserve banking requires banks to keep the full amount of each depositor’s funds in cash and cash equivalents, ready for instant withdrawal on demand. Also known as 100% reserve banking, full-reserve banking provides an alternative to a system in which only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal.
The news comes shortly after Circle filed a registration statement on Form S-4 with the US Securities and Exchange Commission, providing a preliminary statement and prospectus regarding its planned listing through a merger with blank-check firm Concord Acquisition.
Thus, under the terms of the agreement, a new Irish holding company will acquire both Concord and Circle and become a publicly-traded company that is expected to be listed on the New York Stock Exchange.
Source: Cointelegraph | Image: US News