U.S. Crypto Banking System Special Report (Part 1): Circle Secures Banking Charter — Why Are Web3 Companies Collectively Moving Toward "Bankification"?

On July 10, 2026, Circle officially received approval for a National Trust Bank charter, becoming one of the first stablecoin issuers worldwide to formally enter the U.S. federal banking regulatory system. This not only signifies Circle's compliance upgrade from state-level to federal supervision, but also marks a critical turning point in U.S. digital asset regulatory logic: a gradual shift from restrictive regulation toward integrating Web3 infrastructure into the unified federal financial system. [1] Following the GENIUS Act's establishment of a federal regulatory framework for payment stablecoins, an increasing number of Web3 companies have begun proactively applying for National Trust Bank charters. For stablecoin issuers, a federal charter not only satisfies the compliance requirements for payment stablecoin issuers and grants Federal Preemption, reducing cross-state operational costs, but also provides a potential institutional foundation for future applications to access the Federal Reserve payment system and build independent clearing capabilities. These institutional incentives have collectively driven the transformation of the U.S. Web3 industry from traditional Web3 enterprises into licensed financial infrastructure providers. [2]

Meanwhile, U.S. digital asset regulatory policy is undergoing profound adjustments. After experiencing the "Crypto Debanking" phase characterized by restrictions on banks serving Web3 enterprises, the United States has gradually abandoned the policy path of promoting an official Central Bank Digital Currency (CBDC). Instead, it has chosen to support federally regulated private dollar stablecoins to incorporate the digital dollar system into the traditional financial regulatory framework, thereby consolidating the dollar's competitive advantage in global digital finance and cross-border payment systems. [3] However, this institutional restructuring is not without controversy. The traditional banking industry generally believes that once Web3 enterprises become National Trust Banks, they enjoy federal banking status and related institutional advantages without bearing the corresponding capital regulation, deposit insurance, and community reinvestment obligations that commercial banks assume, potentially creating regulatory arbitrage and increasing risks to the financial system. [4] Furthermore, whether Web3 institutions can gain access to the Federal Reserve payment system in the future, how they address potential legal challenges, and how the implementing rules of the GENIUS Act ultimately take shape will continue to influence the development direction of the U.S. Crypto Banking system. Therefore, Circle's approval for a National Trust Bank charter is not merely a significant compliance event for a single company, but also an important window into observing the restructuring of the U.S. digital financial regulatory system and the dawn of the Web3 banking era.

This research report will analyze Circle's acquisition of a U.S. National Trust Bank charter and attempt to answer six core questions: First, what exactly is the National Trust Bank charter Circle obtained, and why is its legal positioning different from traditional commercial banks? Second, after the GENIUS Act officially took effect, why are more and more Web3 companies proactively applying for federal banking charters? Third, why has U.S. regulatory policy gradually shifted from the previous Crypto Debanking toward Crypto Banking? Fourth, how will this change reshape the competitive landscape of the U.S. stablecoin, digital asset custody, and payment infrastructure sectors? Fifth, why does the traditional banking industry strongly oppose Web3 institutions obtaining National Trust Bank charters, and what are the main legal controversies? Sixth, does Circle's charter approval indicate that the United States is building a new generation of Crypto Banking system composed of stablecoin issuers, digital asset custodians, and traditional banks?

Note: Due to space limitations, this research report is published in two parts. This is the first part (covering Chapter 1: Event Background and Charter Attributes; Chapter 2: Driving Factors Behind Web3 Institutions' Federal Charter Applications). The remaining chapters (Chapter 3: Evolution of U.S. Web3 Financial Policy; Chapter 4: Federal Charter Application Trends in the Web3 Industry; Chapter 5: Traditional Banking Industry Reactions and Potential Legal Risks; Chapter 6: Market Impact and Future Key Indicators) will be completed in the second part.

Table of Contents

• Chapter 1: Event Background and Charter Attributes
• Event Background: Circle Receives National Trust Bank Charter
• Charter Attributes: Business Scope of a National Trust Bank
• Chapter 2: Driving Factors Behind Web3 Institutions' Federal Charter Applications
• Regulatory Requirements: The GENIUS Act Compliance Framework
• Cost and Operational Optimization: Federal Preemption Replacing State MTLs
• Settlement Independence: Direct Access to the Federal Reserve Payment System?
• Chapter 3: Evolution of U.S. Web3 Financial Policy
• "Controlled Integration"
• The Macro Objective of Incorporating Stablecoins into the Federal Financial System
• Chapter 4: Federal Charter Application Trends in the Web3 Industry
• A Wave of Federal Charter Applications
• Market Differentiation Between Federally and State-Chartered Institutions
• Chapter 5: Traditional Banking Industry Reactions and Potential Legal Risks
• Traditional Banking Industry Criticism and Concerns Over Approving Web3 Trust Banks
• Uncertainties After Charter Approval
• Chapter 6: Market Impact and Future Key Indicators
• Stablecoin Issuer Dynamics and Market Concentration Trends
• Key Timelines and Follow-up Tracking
• Key Points Structure Chart
• References

Compliance Note: The Circle National Trust Bank charter, stablecoin regulation, and the U.S. Crypto Banking system discussed in the following content are intended solely to introduce U.S. digital financial regulatory policies and market development trends, and do not constitute any investment advice, legal opinion, or financial service recommendation. Stablecoins are digital assets whose issuance, circulation, custody, and related businesses are subject to varying degrees of legal regulation in different countries and regions. In Mainland China, virtual currency-related trading matching, token financing, and certain digital asset businesses may involve illegal financial activities. Readers should strictly comply with applicable local laws and regulations (Mainland China readers are strongly advised to read the <Compilation and Key Summary of Laws and Regulations Related to Blockchain and Virtual Currencies in Mainland China). This research report aims to analyze how the U.S. financial regulatory system is gradually incorporating digital assets into traditional financial infrastructure and to explore the impact of these institutional arrangements on global digital finance development. It should not be interpreted as a value judgment or investment recommendation regarding any digital asset, stablecoin, or related business model.

Chapter 1: Event Background and Charter Attributes

Circle's approval for a National Trust Bank charter reflects the profound adjustments underway in the U.S. Web3 regulatory system. To understand the true significance of this event, it is first necessary to clarify the legal positioning of National Trust Banks, the specific content of Circle's approval, and why this charter is regarded as an important institutional arrangement connecting the Web3 industry with the federal financial system.

Event Background: Circle Receives National Trust Bank Charter

On July 10, 2026, Circle's entity, First National Digital Currency Bank, received unconditional final approval from the Office of the Comptroller of the Currency (OCC) to establish a National Trust Bank, named Circle National Trust [1]. This marks the first time the United States has allowed a globally leading stablecoin issuer to formally enter the federal banking regulatory system as a National Trust Bank, signifying Circle's institutional upgrade from state-level to federal supervision, and meaning that USDC and its underlying digital asset custody infrastructure have begun to be incorporated into a unified federal banking regulatory framework.

Reviewing the entire approval process, Circle formally submitted its application to establish a National Trust Bank to the OCC on June 30, 2025 [5], and received Conditional Approval on December 12 of the same year. Here, "conditional" means that the OCC granted only preliminary conditional approval for charter organization. Circle was required to satisfy a series of strict pre-opening requirements and mandatory regulatory metrics before formally commencing operations, after which it could obtain the final operating charter. Subsequently, Circle successively completed all pre-opening conditions required by the OCC, including minimum capital requirements, corporate governance, risk management, internal controls, and independent audits, ultimately receiving unconditional final approval in July 2026.

The market generally believes that this approval not only further consolidates Circle's compliance advantages in the stablecoin market, but also implies that it may expand into higher-value businesses such as institutional custody, reserve management, and payment infrastructure. It is therefore regarded as an important milestone in Circle's long-term competitiveness.

More importantly, the significance of this approval transcends a single company obtaining a banking charter, reflecting structural changes in the U.S. Web3 regulatory system. Previously, stablecoin issuers primarily relied on state Money Transmitter Licenses (MTLs) or state-level trust charters (such as New York's BitLicense) to conduct business, requiring them to separately satisfy different regulatory requirements in each state while facing high cross-state operational costs and fragmented regulatory standards. With Circle obtaining an OCC-issued National Trust Bank charter, its core custody business has begun to be incorporated into a unified federal regulatory framework, indicating that stablecoin infrastructure is gradually moving away from fragmented state-level supervision toward a nationally unified federal regulatory system.

Furthermore, Circle's approval does not mean it has become a traditional commercial bank, but rather marks its first participation in U.S. digital financial infrastructure construction as a federally licensed financial institution. Transitioning from relying on state-level licenses to entering the unified federal banking regulatory system not only reshapes Circle's own compliance architecture, but also signifies that the U.S. Crypto Banking system has entered a new phase of development, laying the institutional foundation for more Web3 institutions to apply for federal charters in the future.

Charter Attributes: Business Scope of a National Trust Bank

Circle ultimately chose to apply for a National Trust Bank charter rather than a traditional Full-Service National Bank charter, not due to limitations in business scale or operational capability, but because of the institutional advantages of the National Trust Bank charter in terms of legal positioning, regulatory requirements, and business model. For Web3 institutions whose core businesses are stablecoin issuance, digital asset custody, and payment clearing, the National Trust Bank charter can maintain federal regulatory qualifications while maximally preserving the asset-light, high-efficiency development model of the digital asset industry. It has therefore gradually become the primary path for U.S. Web3 institutions seeking federal charters.

According to Section 27(a) of the National Bank Act and related regulations, a National Trust Bank is a type of Special Purpose National Bank whose statutory business scope is primarily limited to trust, fiduciary management, and related asset custody services [7]. Unlike traditional commercial banks, National Trust Banks do not assume the role of financial intermediary in the traditional financial system. The law explicitly prohibits them from accepting public demand deposits for daily retail purposes, nor may they use customer funds for commercial lending or other credit creation activities [8]. In other words, the core function of a National Trust Bank is not "operating funds" but "managing assets." It primarily acts as a trustee or custodian, safely holding and managing assets for clients, performing custody, clearing, settlement, and fiduciary duties as required by law or contract—not like traditional commercial banks that earn interest spreads by taking deposits and making loans. Therefore, its business logic is closer to that of an infrastructure provider in the digital asset era than a traditional deposit-taking bank.

It is precisely this legal positioning of "no deposit-taking, no lending" that makes the National Trust Bank one of the most attractive federal charters for the Web3 industry. From a regulatory structure perspective, because National Trust Banks do not simultaneously possess both core commercial banking functions of "accepting deposits + making loans," they typically do not trigger the Bank Holding Company Act (BHCA) criteria for classification as a bank holding company. This means their parent companies do not need to undergo Consolidated Supervision by the Federal Reserve—that is, the entire group does not need to be treated as a unified bank holding company subject to comprehensive prudential regulation covering capital adequacy, risk management, related-party transactions, and liquidity—and commercial enterprises may legally hold controlling interests in National Trust Banks [9].

At the same time, National Trust Banks are exempt from a series of regulatory obligations borne by traditional commercial banks. For example, they are not required to pay deposit insurance premiums to the Federal Deposit Insurance Corporation (FDIC), nor are they required to fulfill statutory obligations under the Community Reinvestment Act (CRA) to provide credit support to specific communities. These institutional arrangements reflect that National Trust Banks are not regarded as traditional commercial banks performing social credit creation functions, but rather as special financial institutions positioned to perform professional functions such as asset custody, trust management, and financial infrastructure services. From an institutional design perspective, this regulatory arrangement actually creates a relatively balanced supervision model. On one hand, National Trust Banks must accept ongoing OCC supervision, meeting federal banking standards in capital adequacy, risk management, internal controls, anti-money laundering (AML), and consumer protection, thereby gaining the high credibility and market recognition that federal regulation brings. On the other hand, because they do not undertake high-risk businesses such as accepting public deposits or credit expansion, they are also exempt from the corresponding capital costs and regulatory burdens of traditional commercial banks. This allows Web3 institutions to maintain innovation efficiency while obtaining the institutional foundation needed to enter the federal financial system.

For Circle, this is precisely the greatest strategic value of the National Trust Bank charter. Compared to directly applying for a full-service commercial bank charter, it can obtain federal-level compliance endorsement and Federal Preemption while avoiding the complex and costly capital regulation system of traditional commercial banks, achieving institutional balance among digital asset custody, stablecoin reserve management, and future payment infrastructure construction. We can see that the National Trust Bank is not a "shrunk-down version" of a commercial bank, but rather a specialized banking form better suited to the business characteristics of the digital asset industry, and an important institutional innovation promoted by U.S. regulators in recent years for developing Crypto Banking.

In terms of specific business planning, the National Trust Bank Circle received approval for will not immediately assume all USDC operations. According to its application materials submitted to the OCC, its primary function in the initial phase of operation remains limited to providing digital asset fiduciary custody services for Circle and its affiliates. Currently, the actual issuer of USDC will continue to rely on state-licensed entities, while USDC reserve management and custody services for external institutional clients (such as commercial banks, Web3 platforms, clearing institutions, and derivatives trading institutions) are listed as future business plans to be progressively developed, not launched simultaneously with the charter approval [8].

This means that Circle National Trust is currently closer to an internal digital asset infrastructure platform for the group, with its primary responsibility being to establish custody and compliance systems that meet federal regulatory requirements, rather than immediately commencing large-scale commercial operations. As regulators continue to validate its risk management, capital adequacy, and operational capabilities, its business scope is expected to gradually expand into higher-value areas such as stablecoin reserve management, institutional-grade digital asset custody, and payment clearing.

Chapter 2: Driving Factors Behind Web3 Institutions' Federal Charter Applications

Web3 institutions applying for federal financial charters has become a trend. Therefore, a more noteworthy question is: Why are not just Circle, but an increasing number of Web3 institutions, choosing to apply for federal banking charters at nearly the same time?

Through observation, we find that this phenomenon is an institutional result of the restructuring of the U.S. stablecoin regulatory framework. On one hand, the GENIUS Act established, for the first time, a unified federal regulatory system for payment stablecoins, significantly raising the compliance threshold for stablecoin issuance. On the other hand, the nationwide unified operating qualification, Federal Preemption, and the possibility of future access to the U.S. underlying payment system brought by federal charters have made them increasingly important infrastructure for Web3 institutions participating in the next phase of digital financial competition. Therefore, understanding the real reasons behind the collective "banking" of Web3 institutions requires analysis from three levels: regulatory institutions, operational costs, and financial infrastructure.

Regulatory Requirements: The GENIUS Act Compliance Framework

What triggered this round of "charter race" among Web3 institutions was the official enactment of the GENIUS Act. On July 18, 2025, the United States officially signed the GENIUS Act, establishing the first federal regulatory framework specifically for Payment Stablecoins in U.S. history, and explicitly stipulating for the first time at the federal legislative level that only approved Payment Stablecoin Issuers (PPSI) are eligible to legally issue payment stablecoins in the United States.

Compared to the previous regulatory model that relied heavily on state-level supervision and administrative guidance, the most significant change of the GENIUS Act lies in its establishment of the first nationwide unified access system. Stablecoin issuance is no longer merely a commercial choice for enterprises, but has become a licensed financial business directly regulated by federal law. This means that for any institution hoping to continue issuing payment stablecoins in the U.S. market, obtaining issuance qualification that meets federal standards has gradually transformed from a competitive advantage into a basic prerequisite for market entry.

According to the GENIUS Act, there are three main paths to becoming a PPSI: first, issuing stablecoins as a subsidiary of an Insured Depository Institution; second, obtaining approval from the Office of the Comptroller of the Currency (OCC) to become a Federal Qualified Nonbank Issuer, and the National Trust Bank falls precisely into this category; third, obtaining approval from state regulators and satisfying the federal minimum standards stipulated by the GENIUS Act to become a state-qualified issuer [10].

From an institutional design perspective, these three paths correspond to the three long-standing financial regulatory models in the United States: the traditional commercial banking system, the federal nonbank financial institution system, and the state financial regulatory system. However, for leading Web3 institutions with large business scales and customer bases spanning the nation or even the globe, directly applying for a National Trust Bank charter undoubtedly offers greater institutional certainty. On one hand, they can receive direct OCC