The Office of the Comptroller of the Currency granted Circle final approval on July 10 to operate a national trust bank under federal supervision, integrating the issuer of the USDC stablecoin more deeply into the US financial system. Circle described the approval as a significant milestone for USDC, giving the company a federally regulated framework to manage its reserves and custody. The development, however, has raised concerns among traditional lenders. Industry warnings suggest that the growing adoption of stablecoins could pull as much as $500 billion out of conventional bank deposits, as customers shift funds into digital dollar alternatives. The move highlights an escalating tension between the expanding role of regulated stablecoin issuers and the deposit base that underpins traditional banking, a dynamic likely to draw further scrutiny from regulators and financial institutions alike.
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