Circle ChesnotCircle, a digital payments company, stated Monday that it plans to operate as a full-reserve digital commercial bank.CEO Jeremy Allaire stated that full-reserve banking as well as digital currency technology would make the financial system more resilient.Market value for the USDC stablecoin of the company, which is second after Tether, is $27.5 billion.Subscribe to our daily newsletter 10 Things Before The Opening Bell.According to Jeremy Allaire, CEO of Circle digital payments company, the company plans to be a full-reserve commercial bank in the country. This announcement was made Monday.Allaire stated that Circle's goal was to create a global digital currency bank. It is regulated the same as traditional commercial banks, held to the same standards and has the same payment and transaction mechanisms.In a blog post, Allaire stated that "full-reserve banking, built upon digital currency technology can lead to not only a radically better efficient but also a safer and more resilient financial system."He stated that Circle has been committed to responsible financial services innovation since its inception and have had constructive relationships with regulators around the globe.According to the company, it will work under the supervision of agencies such as the Federal Reserve and the Treasury Department, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.Allaire stated that the USDC stablecoin has seen a significant increase in value over the past year. Its market capitalization is $27.5 billion. According to CoinMarketCap.com, it's the second largest stablecoin behind Tether. In late 2020, Circle partnered up with Visa to enable USDC payments on its cards.Traditional assets like fiat currencies or short-dated government bonds are used to back stablecoins like USDC and Tether. Their critics point out a lack in transparency about the reserve levels and the amount of hard assets their issuers have to back their coins. Their supporters, however, point out their stability in comparison to other, more volatile cryptocurrencies.Circle is partially backed by Goldman Sachs. It said that it would continue to strengthen its "long-standing commitment for trust, transparency, and accountability in dollar-denominated reserve backing USDC."Allaire stated that USDC would grow to hundreds of billions in circulation over the next few years. It will also continue to support trillions in low-friction and high-trust economic activity. Allaire added that USDC would be widely used in financial services applications and online commerce.
