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USDC’s Circle Files with SEC to Become a Commercial Bank
According to a post on Circle’s website by Founder and CEO Jeremy Allaire, the USDC stablecoin has filed with the Securities and Exchange Commission to become a U.S. federally-chartered national commercial bank. This happens amid executives at Tether, its larger rival, facing a criminal probe by U.S. prosecutors.
Though the firm officially announced its decision to become a bank in its August 9th blog post, their S-4 filing to the SEC on August 6th insinuated its plans to become a bank.
The second-biggest stablecoin issuer targets to become the first full-service U.S. federally-chartered crypto bank. The rising crypto value has evoked regulatory concerns of a bubble, which could awaken an exodus akin to a run on the banks. However, circle believes that full-reserve banking, built on digital currency technology, will eventually make way for a radically more efficient and more resilient financial system.
Circle said in a blog post that it is undertaking the new move alongside the efforts of the top U.S. financial regulators. Through the President’s Working Group on Financial Markets, the firm plans to manage the risks and opportunities posed by large-scale private-sector dollar digital currencies in a better manner.
Leading Digital Currency into the Mainstream Economy
Allaire said that Circle had recently amplified the declarations to integrate specifics on the structure of the stablecoin’s reserves. In addition, the company has pledged to publish details on the fundamental liquidity of USDC as it gets closer to national bank-level regulatory supervision.
The proposed digital currency bank will operate under the governance of the Federal Reserve, Office of the Comptroller of the Currency (OCC), U.S. Treasury, and the Federal Deposit Insurance Corporation (FDIC) if they are approved.
Allaire anticipates that USDC would grow in valuation to hundreds of billions of dollars in circulation, supporting trillions of dollars in economic activity and become widely used in financial services, making it safer and more robust internet commerce applications.
The Circle payments technology company was established in October 2013 as a peer-to-peer payment network by Jeremy Allaire and Sean Neville. Afterward, it launched a crypto exchange (Poloniex), an investment app, and a payments service (Circle Pay).
However, most of its focus is on its USD Coin that launched three years ago to convert U.S. dollars into blockchain tokens and digital currency. The stablecoin has become a popular digital currency and has seen circulation grow to over $27 billion in 2021.
Since its inception, Circle, in partnership with Coinbase and through the Centre Consortium, formed USDC to conform with demanding U.S. money transmission supervisory and regulatory standards.