Circle’s OCC Bank Charter Lands as Its Stock Rally Fizzles

Circle Internet Group’s stock climbed as much as 16% Friday after federal regulators approved its bid to open a national trust bank. By the closing bell, it had given back more than half that gain.

The U.S. Office of the Comptroller of the Currency cleared Circle to launch Circle National Trust, formally chartered as First National Digital Currency Bank, N.A. Jeremy Allaire, Circle’s co-founder, chairman and chief executive, called it a defining step for the company’s stablecoin infrastructure. Wall Street spent the rest of the day picking that claim apart.

The Bank That Cannot Take a Deposit

The new entity carries a formal name, First National Digital Currency Bank, N.A., but Circle plans to run it as Circle National Trust. It is a trust bank, not a commercial one, and that distinction shapes almost everything it is allowed to do.

At launch, it will hold and safeguard digital assets only for Circle and its own affiliates. Circle’s OCC-approved plan to extend custody to select institutions leaves room to grow, but only, in the plan’s own words, depending on demand.

• Custody, not commercial banking – Circle National Trust can hold and safeguard digital assets under fiduciary duty but cannot accept deposits or make loans like an ordinary bank.
• No deposit insurance – as a limited-purpose trust charter, client assets are not FDIC-insured the way a savings account would be.
• USDC issuance stays elsewhere – the entity that actually mints and burns USDC is a separate New York limited-purpose trust company, not Circle National Trust.

The timing is not incidental. The approval lands as the GENIUS Act, a federal stablecoin law enacted in July 2025, moves toward full implementation in early 2027 and requires OCC supervision of large stablecoin issuers.

Why Did Circle’s Rally Lose More Than Half Its Steam?

Circle shares jumped as much as 16% within minutes of Friday’s announcement before sliding back through the session. By the close, the stock had settled for a gain of roughly 5.7%, according to Banking Dive, as analysts split sharply over how much the charter actually changes for Circle’s business.

Retail traders were not the problem. Sentiment on Stocktwits improved to bullish and chatter spiked to high, but the stock still ended up shedding more than half of its opening gains once professional money weighed in.

Wolfe Research called the charter “a favorable regulatory checkpoint, but not a major earnings catalyst,” maintaining its Underperform rating and a $65 price target, below Friday’s intraday high near $73.

Mizuho’s Dan Dolev was blunter. He told clients the rally looked overly optimistic given USDC’s shrinking market value and the arrival of a new rival.

It does not resolve fundamental issues that have been hurting the stock of recent

Dolev made the point in a note seen by Banking Dive, one of several released Friday as Wall Street tried to price a charter that is more symbolic for now than immediately profitable.

Even after Friday’s pop, CRCL sits far below the $263.45 closing high it hit in June 2025, and shares are still down 69% over the past year.

It would not be the first time a bill moved this stock more than a product launch has. A draft version of the CLARITY Act, which would restrict yield on stablecoin balances, knocked roughly 20% off Circle’s shares in a single session in March, even though Circle itself does not pay yield to USDC holders. Republican Senator Tim Scott has separately argued the same bill could help push the wider crypto sector toward $30 trillion in value, a preview of how much is riding on its final text.

USDC’s Reserves Still Sit in a Different Trust

The part of Friday’s news that got the least attention may matter the most. Circle National Trust is not the entity that issues USDC. That job stays with a separate New York limited-purpose trust company, a structure the OCC’s conditional approval locked in months ago.

Circle’s original filing asked to bring management of the USDC Reserve under federal supervision from day one. That plan has since been pushed back. Reserve management is now described only as a future capability, not something the bank will do at launch.

Until now, the cash and short-term Treasurys backing USDC have sat with third-party banking partners, including BNY Mellon, which expanded its custody relationship with Circle just two weeks before the charter came through.

Jasper Sneff-Nanni of FS Vector, a financial regulatory consultancy, said the milestone still matters symbolically. Opening the trust bank is a tremendous accomplishment for Circle and, for stablecoins, a step into the world of the GENIUS Act, he said, adding that although the trust bank is not the issuer of USDC, it cements USDC’s status as the premier incumbent among regulated stablecoins.

The Rival That Threatens Circle’s Core Margins

The charter does nothing to blunt the competitor that actually rattled Circle’s stock this summer.

On June 30, a consortium of more than 140 companies, including BlackRock, Coinbase, Mastercard, Stripe and Visa, launched Open USD, a stablecoin built to share reserve yield with participating partners instead of keeping it for a single issuer.

Circle’s business runs on keeping that yield. Revenue grew 20% year over year to $694 million last quarter, and USDC’s on-chain transaction volume hit $21.5 trillion, up 263% year over year. Circle’s shares still fell from about $75 to $62.18 by the close of trading the day OUSD launched.

Rob Hadick, a general partner at venture capital firm Dragonfly, told CoinDesk the roster of backers behind OUSD clearly suggests a real threat to Circle’s business.

Clear Street’s Owen Lau took the other side. He argued the initial swoon went too far, calling it an overreaction even as his own firm later kept its $157 target on Circle after Friday’s approval.

A Wisconsin Courtroom Raises a Harder Question

None of Friday’s federal paperwork touches a fight already playing out in a Wisconsin courtroom.

Prosecutors in Walworth County charged Circle with criminal contempt after a dispute over a romance scam. A victim, identified only as Victim #1, was persuaded to buy USDC and send roughly 381,000 tokens to a fake investment platform.

A court ordered Circle to invalidate the frozen tokens and issue fresh USDC to the sheriff’s office. Circle refused, saying it lacks the technical ability to burn and reissue tokens sitting inside someone else’s wallet, a position at the center of a criminal contempt complaint filed in Walworth County.

The numbers behind the dispute are stark. AMLBot data shows Tether froze about $3.3 billion in USDT across more than 7,200 wallets between 2023 and 2025. Circle froze about $109 million in USDC over the same period, a 30 times gap by value.

Walworth County prosecutor Thomas Binger has said the dispute shows how quickly scammers can move funds compared with the pace of the legal system. Not everyone wants Circle to move faster, though.

Omid Malekan, an adjunct professor at Columbia Business School, warned that letting issuers act beyond what courts require would erode trust in decentralized finance by introducing centralized points of control.

“If Circle and other stablecoin issuers implement arbitrary freeze or seize functions beyond what the law requires, then not only is code not law, but also law is not law,” he wrote on social platform X.

The contempt case remains open in Walworth County even as Circle’s new federal fiduciary charter takes effect this week.

Circle Joins a Year-Long Queue of Bank Charters

Friday’s approval also sits inside a much bigger wave. Recent OCC actions have included approvals or applications from Coinbase, BitGo, Fidelity Digital Assets, Ripple and Paxos, all racing to own a piece of the regulated financial stack.

1. June 30, 2025: Circle files its national trust charter application with the OCC.
2. Two days later: Ripple applies for its own national trust charter to support RLUSD.
3. August 2025: Paxos applies to convert its New York trust charter into a national one.
4. October 2025: Coinbase files its own application.
5. December 2025: The OCC grants conditional approval to Circle, Ripple, Paxos, BitGo and Fidelity Digital Assets; BitGo’s is upgraded to a full charter almost immediately.
6. February 2026: Stripe-owned Bridge secures a conditional approval.
7. April 2026: Coinbase receives its own full national trust charter.
8. July 2026: Sony Bank’s planned Connectia Trust clears the conditional stage days before Circle’s final charter arrives.

Before any of this, Anchorage Digital Bank had been the only crypto firm holding a national trust charter, a status it held alone since 2021.

Senator Elizabeth Warren has pushed back on the whole wave, arguing in a letter to OCC Comptroller Jonathan Gould that the agency is granting charters to firms that do not qualify under the National Bank Act. The Digital Chamber, which represents more than 250 crypto companies, calls that reading a misreading of both the statute and the OCC’s longstanding charter authority, according to chief executive Cody Carbone.

The approval also landed the same day Swift launched a blockchain consortium linking 17 banks including Citi and HSBC for round-the-clock payments testing, a reminder that Circle is not the only incumbent racing to keep stablecoins from eating traditional payment rails.

Circle’s own footprint already stretches to the UK, Singapore, Bermuda, Canada and Abu Dhabi, where crypto custodian Bitcoin Suisse recently picked up its own license for institutional clients.

Circle says the new bank can open its doors within days. “Circle National Trust is authorized to open on or after July 10, 2026, and we expect to open the bank shortly thereafter,” a company spokesperson told American Banker.