![\"circle\"](\"https:\/\/www.cryptocabaret.com\/wp-content\/uploads\/2021\/08\/shutterstock_2002305155.jpg\")
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Circle, a cryptocurrency fintech services company, announced it intends to become a full-reserve national commercial bank. This would bring a set of responsibilities and duties to the company equal to those of other mainstream banks: having to report to the Federal Reserve, U.S. Treasury, OCC, and the FDIC. However, it would also put the company in a unique position to link blockchain and traditional finance.<\/strong><\/p>\n Circle, a cryptocurrency fintech services company part of the Centre consortium, the issuer of USD Coin, has revealed<\/a> in a blog post yesterday it intends to become a full-reserve national commercial bank. The announcement was made by its CEO Jeremy Allaire in a post where he explains the journey the company will have to undergo to reach that goal. Allaire stated that, since its inception, Circle has intended to become a financial institution.<\/p>\n And now that its flagship stablecoin, USD Coin, has reached a critical issuance mass of more than $27 billion dollars, it\u2019s time to take things a step forward. Allaire stated:<\/p>\n 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.<\/p>\n<\/blockquote>\n The company is embarking on this new journey because it anticipates a boom in the growth of USDC that will ostensibly be a crucial asset in the future of the cryptocurrency market. Allaire state that it is important to establish standards for these currencies. He stated:<\/p>\n 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.<\/p>\n<\/blockquote>\n <\/ins> <\/ins> <\/p>\n Allaire addressed the worries of some customers and analysts in the cryptocurrency market, who have stated that USD Coin is not backed 1:1 by cash or cash equivalents. He recognizes that while the company has strived to maintain a high level of transparency, publishing attestations<\/a> of its holdings, critics have valid points when it comes to \u201cfundamental questions of liquidity, including liquidity in times of intense demand to redeem Usdc.\u201d<\/p>\n For this reason, Allaire stated that now Circle will \u201cbegin to publish information about the fundamental liquidity of USDC and our liquidity coverage under Basel III<\/a>,\u201d a protocol that defines the Liquidity Coverage Ratio banks must maintain to serve users in high-stress periods.<\/p>\nCircle Aiming to Become Full-Reserve Bank<\/h2>\n
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USD Coin Controversy<\/h2>\n