Circle, the issuer of USDC, secured a limited-purpose trust charter from the New York State Department of Financial Services (NYDFS) on July 31, 2026. The charter completes a structure no stablecoin issuer has assembled before: three weeks earlier, the Office of the Comptroller of the Currency (OCC), the federal bank regulator, approved Circle’s national trust bank. The company now holds a federal charter and a state charter, each covering one half of its business.
“Earning a New York trust charter has been a longstanding objective for Circle given the regulatory clarity that comes with it,” co-founder and CEO Jeremy Allaire said. The two-tier setup is the most complete regulatory structure in the sector to date, and one that rivals will struggle to replicate.
One entity issues USDC, the other holds the reserves
Issuing a stablecoin involves two distinct jobs. The issuer has to mint and burn tokens as customers buy and redeem them, and it has to safeguard the reserves that back them. Circle has put each job in its own entity.
| Entity | Regulator | Role |
|---|---|---|
| Circle New York Trust | NYDFS (New York State) | Issues USDC under New York banking law |
| Circle National Trust | OCC (federal) | Holds the reserves and acts as collateral trustee |
The OCC approval, granted on July 10, 2026, created First National Digital Currency Bank, N.A., which operates as Circle National Trust. The New York charter creates Circle Internet Trust Company, and USDC issuance is expected to migrate to it over time.
Under the GENIUS Act, large issuers need federal approval
The charters are not a formality. The GENIUS Act, the first US federal framework for payment stablecoins, requires large issuers to be approved by the OCC. For Circle, federal status is not a compliance extra. It is the price of staying in a market the company already leads.
Tether has nothing comparable
By splitting issuance and custody between two regulators, Circle has built what Coingape calls “a state-federal compliance stack that rivals like Tether cannot currently match.” Tether holds no US license and has been delisted from regulated platforms in the European Union under MiCA. USDC’s lead in regulatory standing may end up mattering as much as its lead in volume.
Banks warn of deposit flight
Not everyone welcomes the new status. Several US banking groups warn that as digital dollars gain legitimacy, some savings could leave traditional deposit accounts for stablecoins. Standard Chartered has estimated that about $500 billion in US deposits could move by the end of 2028, money banks could no longer use to fund loans.
For Circle, the two charters lock in a strategic lead. The company looks less like a crypto startup and more like a regulated financial institution. Open questions remain: whether the dual structure works as promised in day-to-day operations, and whether other issuers, starting with Europe’s bank consortia, can come up with a structure as clear.