Circle Proposes to Establish a Full-Reserve Bank for Crypto Industry

Circle Proposes to Establish a Full-Reserve Bank for Crypto Industry

Circle has proposed the establishment of a full-reserve bank for the cryptocurrency industry. This proposal comes amidst concerns over the fractional banking system and its potential risks.

Fractional banking is a banking system where banks hold only a fraction of their customers' deposits as reserves and lend out the rest to earn interest. A full-reserve bank is a banking system where banks hold all of their customers' deposits as reserves and do not lend them out to earn interest.

In a statement released by Circle, the company confirmed that 100% of deposits from Silicon Valley Bank (SVB) were secure and would be available at banking open the following day.

With the closure of Signature Bank, the minting and redemption of stablecoins would be processed through settlements with BNY Mellon. At the same time, Circle also announced a new transaction banking partner with Cross River Bank to operate the automated minting and redemption process.

Circle expressed its commitment to building a robust and automated $USDC settlement and reserve operations with the highest quality and transparency. The company has advocated for full-reserve digital currency banking that insulates the base layer of internet money and payment systems from fractional reserve banking risk.

The Payment Stablecoin Act, which is actively pursued by Congress, would enshrine in law a regime where stablecoin funds would be held with cash at the Fed and short-term T-Bills. Circle believes that this law is necessary now more than ever to create a truly safe financial system.

 

TokenInsight is dedicated to covering the most important and cutting-edge trends in the world of crypto. If you have information to share with us, please feel free to contact our email news@tokeninsight.com. Your trust will be well respected.

Source

Stablecoins

Policy and Regulation

In This Article

Related News
Circle Claims Stablecoins Aren't Securities in Amicus Curiae Brief of SEC-Binance Case Circle Claims Stablecoins Aren't Securities in Amicus Curiae Brief of SEC-Binance Case
Binance Japan Partners with MUTB, Planning to Issue Stablecoin by End of 2024 Binance Japan Partners with MUTB, Planning to Issue Stablecoin by End of 2024
China Pacific Insurance Group's Subsidiary License Upgrade to Provide Virtual Asset Service in HK China Pacific Insurance Group's Subsidiary License Upgrade to Provide Virtual Asset Service in HK
Hong Kong SFC Publishes List of 4 Virtual Asset Trading Platform Applicants Hong Kong SFC Publishes List of 4 Virtual Asset Trading Platform Applicants
Terra Classic Community Decides to Stop Minting $USTC in Effort to Re-Peg $USTC to USD Terra Classic Community Decides to Stop Minting $USTC in Effort to Re-Peg $USTC to USD
Latest News More More
1 Day Ago Circle Launches Circle Research and Perimeter Protocol
2 Days Ago Three Arrows Capital Co-Founder Zhu Su Apprehended in Singapore, Sentenced to 4-Month Imprisonment
2 Days Ago RWA Sector Grows Fast with Market Cap Increases 60% in 2023, TokenInsight Report Shows
3 Days Ago Oracle Project Supra Closes Over $24 Million in Funding with Coinbase Ventures Involved
3 Days Ago 1xBit Adds Two Exclusive Deposit Methods – Arbitrum and Algorand
delate
Use TokenInsight App All Crypto Insights Are In Your Hands
Open