New York authorities have granted a limited-purpose trust charter to Circle New York Trust. For the issuer of the USDC stablecoin, this is a direct challenge to its main competitor, Ripple. The latter received similar approval from the NYDFS for its RLUSD stablecoin back in December 2024, targeting a market expected to reach $2 trillion by 2028.
Circle has now eliminated that lead, while CEO Jeremy Allaire said that “the race-to-the-top regulatory strategy continues.”
Trust status completely changes the way the company handles money. Circle can now hold the multibillion-dollar reserves backing its stablecoin itself, under the direct supervision of New York financial regulators. It no longer needs to depend on third-party commercial banks or risk losing funds in the event of a bank failure.
For Wall Street, this is a clear and legally recognized signal that institutions can now work directly with USDC.
How Circle’s dual licensing works and why CRCL stock dropped anyway
New York is Circle’s home market. In 2015, the company became one of the first to receive the state’s well-known BitLicense. Circle has now addressed regulatory matters at both the state and federal levels. The new state charter will operate alongside the federal national trust charter previously conditionally approved by the OCC.
Commenting on the development, Allaire said that the company is now building “fundamental financial market infrastructure under supervision that spans the globe, the nation, and the world’s most important financial capital.”
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According to the Circle CEO, the new charter “firmly integrates USDC into a recognized legal framework” at a time when, as he emphasized, “digital dollars are playing an increasingly important role in the global financial system.”
However, shares of Circle Internet Group, Circle’s parent company listed on the NYSE under the ticker CRCL, ignored the major announcement. During trading on July 31, the stock fell to $60.78, completely erasing the previous session’s gains and recording a steep intraday decline despite the strong fundamental catalyst.
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