Circle Wants to Become Chartered Crypto Bank


Circle has announced it intends to become a bank fully regulated by the federal reserve. Occ and fdic. Which could make its us. Dc stable coin a defacto central bank digital currency. It's a bit arcane. But this could really be a huge deal. Quoting axios circles. Dream is to become a narrow bank one that shoes fractional reserve banking entirely and instead places all deposits on reserve at the central bank. Only banks can open accounts directly at a central bank which credits them with pure money in circles case the depositors would be holders of us dc and the collateral backing up us dc would be the money on deposit at the fed. Circle would pocket for itself the interest that the fed pays on bank reserves if the dream were to become reality than circle with effectively be issuing a cryptocurrency backed by the fed itself for all intents and purposes a central bank digital currency or cb dc. If circle was allowed to do such a thing then presumably other banks would be too and they would rapidly start competing with each other to pass through most or all of the interests that the fed pays on reserves.

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