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RLUSD USDC issuer Circle obtains New York trust charter to compete with Ripple's RLUSD
Circle, the company behind the stablecoin USDC, has obtained a limited purpose trust charter from New York authorities. This regulatory approval comes several months after well-known blockchain company Ripple received a similar license from the New York State Department of Financial Services (NYDFS) for its RLUSD stablecoin December 2024. Both companies are targeting rapidly expanding markets, and industry forecasts show that the stablecoin sector could reach US$2 trillion by 2028.
USDC issuers gain new regulatory status
With this new charter, Circle closes the gap with Ripple in terms of regulatory status as issuers of digital dollars operating in New York. CEO Jeremy Allaire declared the victory by saying Circle's "top-to-top regulatory strategy continues."
The Trust Charter marks a major shift in Circle's business operations. Today, Circle is allowed to hold billions of dollars in reserves supporting the USDC directly under the supervision of New York regulators. Previously, the company relied on external commercial banks to hold these reserves, exposing Circle to risks related to the bankruptcy of third-party banks.
This development provides important legal clarity for large financial institutions on Wall Street. Agencies can now interact directly with the USDC within a New York State-recognized framework.
License details and recent share price performance
Circle was founded in 2013 and has positioned New York as the core market for its stablecoin business. In 2015, the company became one of the first institutions to receive the New York State BitLicense, which is designed to regulate the digital asset business and promote consumer protection.
Circle currently holds both the New York State Trust Charter and a conditional federal charter from the Office of the Comptroller of the Currency (OCC), allowing it to operate under dual New York State and federal supervision. This dual licensing strategy is designed to increase the confidence of regulators and institutional partners.
Jeremy Allaire said Circle is "building basic financial market infrastructure under supervision that covers the world, the country and the world's most important financial capital." He also noted that as the digital dollar gains global importance, the USDC is now "firmly integrated into the recognized legal framework."
Circle's charter of trust places USDC reserves under direct supervision from New York regulators, reducing reliance on external banks and providing institutional investors with new legal certainty.
Despite regulatory progress, shares of Circle Internet Group, Circle's parent company, fell sharply on July 31. CRCL shares fell to $60.78 in trading, reversing gains from the previous session and recording a significant one-day decline despite a regulatory breakthrough.
Micro Dictionary
Limited Purpose Trust Articles -A special type of regulatory approval granted by the State of New York that allows financial companies to independently hold customer assets and operate under direct state supervision, ensuring strong consumer protection.
Comparison of stablecoin issuers
Issuer: Circle
Articles of association approval: July 2024
Product: USDC
Target market: 2028
Current market value: US$2 trillion (forecast)
Issuer: Ripple
Charter Approval Time: December 2024
Product: RLUSD
Target Market: 2028
Current market value: US$2 trillion (forecast)
Circle Internet Group is Circle's publicly listed parent company and is listed and traded on the New York Stock Exchange under the symbol CRCL. Shares fell despite positive regulatory news, reflecting broader market dynamics and uncertainty among potential investors.
