Circle Internet Group secured two bank charters in 21 days. On July 10, 2026, the Office of the Comptroller of the Currency (OCC) granted final approval for First National Digital Currency Bank, N.A., operating as Circle National Trust. On July 31, the New York Department of Financial Services (N...
"Earning a New York trust charter has been a longstanding objective for Circle given the regulatory clarity that comes with it." — Jeremy Allaire, Co-Founder, Chairman, and CEO of Circle
Circle Internet Group secured two bank charters in 21 days. On July 10, 2026, the Office of the Comptroller of the Currency (OCC) granted final approval for First National Digital Currency Bank, N.A., operating as Circle National Trust. On July 31, the New York Department of Financial Services (NYDFS) issued a limited purpose trust charter for Circle Internet Trust Company LLC, operating as Circle New York Trust. Combined, the two licenses place $73.2 billion in USDC circulation under dual federal-state banking supervision — the first time a stablecoin issuer has achieved this regulatory depth.
The charters arrive as Circle faces mounting competitive pressure. On June 30, the Open Standard consortium — 140-plus members including Visa, Mastercard, Stripe, BlackRock, and Coinbase — announced Open USD (OUSD), a stablecoin designed to share the majority of reserve income with partner firms rather than retain it at the issuer level. Circle stock (NYSE: CRCL) dropped 17% on the announcement. The Coinbase revenue-sharing agreement, under which Circle paid $908 million in distribution fees in 2024 alone, comes up for renegotiation in August 2026. Coinbase earns approximately $1.35 billion annually from this deal and now sits on both sides of the table.
The stablecoin market has reached approximately $313 billion in total supply across 382 tracked instruments. The question is no longer whether stablecoins matter — total on-chain transaction volume exceeded $28 trillion in the first half of 2026, surpassing Visa and Mastercard combined. The question is who captures the economics: issuers, distributors, or the consortium model.
Circle's regulatory structure now consists of three layers. At the federal level, the OCC charter grants Circle National Trust the authority to provide custody services for Circle and its affiliates, with plans to extend those services to institutional customers, including other banks. Reserve management — the core revenue engine — is described as a future capability, not a service offered at launch, according to Circle's press release.
At the state level, the NYDFS limited purpose trust charter establishes Circle New York Trust, adding state-level fiduciary powers. The NYDFS is widely considered the strictest state financial regulator in the United States; obtaining its charter signals a level of compliance depth that competing issuers have not replicated.
The third layer predates both: Circle's BitLicense, obtained in 2015 as the first firm to receive one. Together, these form what Forkast News described as "a regulatory depth moat no other stablecoin issuer can match."
The OCC charter was enabled by a January 2026 rule change clarifying that national trust banks may engage in non-fiduciary activities in addition to fiduciary activities. This rule was finalized in February 2026, effectively permitting the OCC to charter uninsured national trust banks for crypto-related activities. According to a Duke University analysis published in May 2026, this charter model carries risks because it avoids the full regulatory framework applicable to traditional banks, including FDIC insurance requirements.
The practical significance: Circle previously relied on third-party banks and custodians — including BNY Mellon and BlackRock — to hold the cash and Treasury securities backing USDC. The charter structure creates a path to internalizing reserve management, which would eliminate intermediary fees and place reserves under Circle's direct control.
Circle reported Q1 2026 revenue of $694.1 million, up 20% year over year, with adjusted EBITDA of $151 million at a 53% margin. Net income was $55.3 million, with EPS of $0.23.
Beneath the headline growth, operating metrics show strain. Operating income fell to $45 million in Q1 2026 from $93 million in Q1 2025. Total operating expenses rose to $104 million from $62 million a year earlier, with selling, general, and administrative costs reaching $77 million, up from $42 million. Operating margin compressed to 6%.
USDC circulation ended Q1 at $77 billion, up 28% year over year, holding roughly flat sequentially despite a 45% decline in digital asset markets from their October 2025 peak. On-chain USDC transaction volume surged 263% year over year to $21.5 trillion — a figure that reflects growing institutional and commercial settlement use.
For FY 2026, Circle guided Other Revenue at $150–$170 million and RLDC (Revenue Less Distribution and Transaction Costs) margin at 38–40%. The company reports Q2 2026 earnings on August 5.
Circle's stock traded at approximately $62.36 as of July 24, 2026 — well above the $31 IPO price from June 2025, when shares surged 168% on their first day. The IPO was priced with 34 million shares after upsizing due to demand.
The financial picture reveals Circle's core vulnerability: distribution costs. More than half of Circle's revenue goes to partners — primarily Coinbase — for USDC distribution. The bank charters create a path to reduce dependency on intermediaries for reserve custody, but the distribution cost problem requires a different solution.
On June 30, 2026, the Open Standard consortium announced Open USD (OUSD), structured around three economic propositions that directly undercut Circle's model:
The consortium counts 140-plus members. The roster includes Visa, Mastercard, Stripe, BlackRock, BNY, and Coinbase. OUSD is planned to launch across Solana, Stellar, Base, Polygon, and additional chains later in 2026.
The economic logic is straightforward. USDC operates as a proprietary stablecoin where Circle captures reserve income and redistributes a negotiated share to distributors. OUSD inverts this: the stablecoin becomes a utility layer for the consortium, and reserve income flows to participants. For businesses that move large stablecoin volumes — Visa processed $1.8 trillion in payment volume in Q1 2026 alone — the revenue-sharing model offers a financial incentive to switch from USDC.
According to CoinShares research, OUSD's model mirrors the economics of traditional correspondent banking, where the infrastructure is shared and participants capture economics proportional to their contribution. The difference is that OUSD codifies this at the protocol level.
The market priced the threat immediately. Circle stock fell 17% in the week following the announcement, according to CryptoBriefing.
The Coinbase-Circle Collaboration Agreement runs on an initial three-year term through August 2026, with automatic three-year renewals dependent on performance metrics. Under current terms, Coinbase earns 100% of interest income on USDC reserves held on its platform and 50% from elsewhere. This generated approximately $1.35 billion in annual revenue for Coinbase, according to public disclosures.
Circle paid Coinbase $908 million in distribution fees in 2024 — more than half of Circle's total revenue for the year. This cost structure is the single largest constraint on Circle's profitability.
The renegotiation occurs against a backdrop where Coinbase is simultaneously a launch partner in the Open USD consortium. Coinbase now has leverage: if Circle does not improve revenue-sharing terms, Coinbase can shift distribution weight toward OUSD, where the economic model is more favorable.
Circle has signaled competitive intent. The company launched cirBTC, a wrapped Bitcoin product, in what Yahoo Finance described as a direct challenge to Coinbase's $6 billion cbBTC franchise — announced months before the deal renewal. The move suggests Circle is positioning to reduce its dependence on Coinbase by developing its own distribution channels and expanding its product line.
The outcome of this negotiation will determine whether Circle's distribution cost structure improves or deteriorates. Neither company has disclosed terms of ongoing discussions.
Tether occupies a fundamentally different position. The company holds approximately $186.35 billion in USDT supply, representing 59.22% of the stablecoin market. Tether reported $10 billion in profit for 2025 and generated $1.5 billion in net operating profit in Q2 2026, according to its attestation reports.
Tether operates from El Salvador under a Digital Asset Service Provider license obtained in January 2025 and is not eligible for GENIUS Act licensure, which requires US domicile. This is a deliberate strategic choice: Tether captures reserve income from US Treasury holdings while operating outside the US regulatory perimeter.
According to Blockhead, Tether has become a top-20 holder of US Treasuries. The company's reserve portfolio generates income through investing USDT holders' dollars in Treasury securities and repurchase agreements, a model that produces margins Circle cannot match because Circle operates within the US tax and regulatory framework.
The regulatory divergence is stark. Circle now holds federal and state bank charters, submits to OCC and NYDFS supervision, and operates as a publicly traded company with SEC reporting obligations. Tether publishes quarterly attestations from BDO Italia but has never completed a full audit. The two largest stablecoin issuers, controlling 83% of the $313 billion market, operate under fundamentally incompatible regulatory regimes.
The stablecoin business model is structurally simple: hold customer deposits, invest them in short-duration Treasuries and cash equivalents, and retain the spread. At current US Treasury yields of approximately 4.2–4.5% on short-duration instruments, a $73 billion USDC float generates roughly $3.1–$3.3 billion in annual gross reserve income. Tether's $186 billion generates proportionally more.
The economic question driving the current restructuring is who captures that income. Under the USDC model, Circle retains the income and pays distributors from it — with Coinbase alone capturing $1.35 billion annually. Under the OUSD model, reserve income flows to the consortium, with the issuer retaining a smaller operational fee.
For context, the OCC's proposed GENIUS Act implementation rules require prospective payment stablecoin issuers (PPSIs) to submit formal applications outlining business models, governance structures, reserve management approaches, technology infrastructure, and risk controls. The 60-day comment period closed May 1, 2026. Final rules have not been issued.
The regulatory framework benefits Circle's bank charter model because it creates barriers to entry: obtaining an OCC charter requires capital, compliance infrastructure, and regulatory expertise that most prospective issuers lack. However, the OUSD consortium sidesteps this by designating a single licensed issuer while distributing economics across 140-plus partners. Whether this consortium model satisfies GENIUS Act requirements remains untested.
Circle's dual bank charters represent the deepest regulatory positioning any stablecoin issuer has achieved in the United States. The OCC and NYDFS approvals create a compliance moat that will be difficult and expensive for competitors to replicate.
Whether that moat translates into durable economics is less certain. The OUSD consortium directly challenges Circle's revenue model by redistributing reserve income to partners rather than concentrating it at the issuer. Coinbase's dual role — as Circle's largest distribution partner and an OUSD consortium member — creates a negotiating dynamic that could compress Circle's margins further.
The stablecoin market has matured past the question of adoption. At $313 billion in supply and $28 trillion in H1 transaction volume, these instruments are embedded in global payment infrastructure. The contest now is over the economics: whether value accrues to licensed issuers, to distribution networks, or to consortium structures that treat the stablecoin itself as shared infrastructure. Circle's bank charters bet on the first model. The 140-company OUSD consortium bets on the third.