Circle Adds NY Trust Charter to Its Belt, USDC Now Has More Licenses Than a Manhattan Doorman

Circle, the issuer of the USDC stablecoin, has received a limited purpose trust charter from the New York Department of Financial Services for its subsidiary Circle Internet Trust Company LLC, doing business as Circle New York Trust. The charter, announced Friday, was issued under New York Banking Law and allows the subsidiary to exercise fiduciary powers and conduct activities such as custodial services, investment management, corporate trust, transfer agency and securities clearance. Under the framework, charter holders cannot accept deposits or make loans like traditional banks; NYDFS noted that some applicants seek to engage in virtual currency-related activity.

"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. He added that the charter "reflects over a decade of regulatory commitment and positions USDC within a strong, respected framework as digital dollars become central to the global financial system." Circle was the first company to receive a NYDFS BitLicense in 2015, allowing it to conduct virtual currency business in New York.

The New York approval builds on Circle's earlier federal action: the Office of the Comptroller of the Currency cleared the company's application to establish a national trust bank earlier this month, enabling Circle to move key USDC operations under a federal banking framework and offer digital asset custody services. Circle Internet Group trades on the New York Stock Exchange under the ticker CRCL; shares rose 8.4% on the day at around $68.40 following the announcement, according to Yahoo Finance.

USDC, Circle's US dollar-pegged stablecoin, has a market capitalization of $71.8 billion, making it the second-largest stablecoin behind Tether USDt (USDT) and the fifth-largest cryptocurrency. The company said it plans to use a recently acquired portfolio of nearly 1,000 blockchain patents purchased from IBM across USDC, the Circle Payments Network and its Arc blockchain.

Circle's New York charter arrives alongside other recent market moves: Coinbase reported $1.22 billion in second-quarter revenue on Thursday, down 14% from the previous quarter, and a net loss of $359 million, sending its shares roughly 5% lower in after-hours trading after it missed analyst estimates of $1.29 billion. Cathie Wood's Ark Invest sold about $4.4 million worth of crypto-related stocks on Wednesday, trimming positions in Bitmine Immersion Technologies, Robinhood, Block and Bullish, and crypto exchange Luno announced it is cutting about 20% of its staff worldwide, according to Bloomberg.