Stablecoin issuer Circle just got the greenlight to operate as a bank. The shares are up 7%

Stablecoin issuer Circle surged after the U.S. Office of the Comptroller of the Currency, or OCC, granted it approval Friday to operate as a trust bank, the company said. Shares of the company gained more than 7%. The approval gives the company the ability to manage reserves directly for its regulated stablecoins, primarily the USDC stablecoin, which has more than $73 billion in circulation. The new bank will operate under the name Circle National Trust. Previously, Circle needed third-party banks and custodians to hold the cash and Treasury assets backing USDC. The charter does not greenlight Circle to operate as a commercial bank that takes deposits and makes loans. The news reflects a broader trend in the crypto industry, where companies are trying to make a big shift from being financial applications to financial infrastructure. Recent OCC actions have included approvals or applications from Coinbase, BitGo, Fidelity Digital Assets, Ripple and Paxos, reflecting the race to own more of the regulated financial stack. Additionally, the charter gives Circle a national bank regulator, rather than being subject to state-based regulation – a major pain point for fast-paced startups playing in the heavily regulated financial services industry. Instead of a single rulebook, companies regularly face 50 slightly different ones that not only can slow growth but also increase costs. The stablecoin race has been heating up after Washington nearly a year ago brought greater regulatory clarity to digital assets with the GENIUS Act, which established a federal framework for payment stablecoins. As a result, traditional financial firms increasingly want to issue their own stablecoins – which presents a growing competitive challenge for USDC – because they can capture payment flows, deepen customer relationships and build financial services on top of programmable digital dollars rather than relying on third-party issuers like Circle. The OCC charter approval comes on the same day global financial messaging network Swift launched a blockchain consortium with 17 banks, including Citi and HSBC, in a 24/7 payments push to help it compete in the stablecoin race. Also in June, a consortium of more than 140 companies — including Blackrock, Coinbase, Mastercard, Stripe and Visa — joined the new Open USD (OUSD) stablecoin effort, where reserve yields are distributed to participating partners rather than a single issuer. The OCC has not responded to a CNBC request for comment.