Circle Banks Another Charter: NY Says "Trust Me" 🏦

Circle Internet Group (NYSE: CRCL) said Friday that the New York Department of Financial Services has granted a limited purpose trust charter to its subsidiary, Circle Internet Trust Company LLC, also known as Circle New York Trust. The approval, announced July 31, allows the unit to exercise fiduciary powers and conduct activities such as custodial services, investment management, corporate trust, transfer agency and securities clearance under New York Banking Law, but does not authorize Circle to accept deposits or make loans like a traditional bank.

"Earning a New York trust charter has been a longstanding objective for Circle given the regulatory clarity that comes with it," CEO Jeremy Allaire said in a press release. Allaire added that the charter positions USDC within a "strong, respected framework as digital dollars become central to the global financial system."

The NYDFS charter arrives three weeks after Circle secured final authorization from the Office of the Comptroller of the Currency for Circle National Trust, a federally chartered digital-asset trust bank, following an OCC announcement on July 10 that sent CRCL stock up 10%. Together, the two approvals establish a dual state-federal regulatory structure for Circle's stablecoin operations, with NYDFS overseeing USDC issuance in New York and the OCC governing national custody activities.

Circle was the first company to receive a NYDFS BitLicense in 2015, allowing it to conduct virtual currency business in New York. The company issues the US dollar-pegged stablecoin USDC, which has a market capitalization of $71.8 billion, making it the second-largest stablecoin behind Tether USDt (USDT) and the fifth-largest cryptocurrency overall.