Circle, the issuer of the USDC stablecoin, has received conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) to establish a First National Digital Currency Bank, a U.S. National Trust Bank. This landmark regulatory move, announced in early January 2026, will bring USDC's reserves under direct federal bank-level oversight and integrate its custody and settlement infrastructure into the traditional U.S. banking system.
The approval allows Circle to manage USDC's reserves—backed by cash and short-term U.S. Treasuries—within a federally regulated framework, ensuring compliance with U.S. banking laws and enhancing transparency. The new trust bank is explicitly designed for institutional clients, providing them with regulated digital asset custody and settlement services. This development is seen as a critical step in bridging decentralized finance with traditional banking, aiming to boost institutional confidence in using USDC for large-scale, regulated on-chain payments and treasury operations.
This regulatory advancement comes as USDC continues to outpace its larger rival, Tether's USDT, in growth for the second consecutive year. In 2025, USDC's market capitalization surged 73% to $75.12 billion, while USDT grew 36% to $186.6 billion. Analysts attribute USDC's outperformance to rising institutional demand for regulated, transparent stablecoins, especially following the passage of the GENIUS Act, which created a comprehensive U.S. framework for payment stablecoins.
Circle's compliance with frameworks like the Markets in Crypto-Assets (MiCA) regulation in Europe and its integration with major financial players like Visa, Mastercard, and BlackRock have further cemented its position as the preferred stablecoin for regulated entities. In contrast, Tether's USDT remains unregulated in the U.S. and Europe.
The OCC's approval signals a broader trend of stablecoin integration into the traditional financial system, with U.S. Treasury Secretary Scott Bessent projecting the stablecoin market could grow to $3.7 trillion by the end of the decade.
