US-based crypto payments start-up Circle Internet Financial is getting closer to applying for a banking licence, Bloomberg reported citing Circle CEO Jeremy Allaire.

Circle first announced its intention to become a Federally chartered national commercial bank in August 2021.

Ever since the announcement, the firm has been holding talks with the regulators, Allaire told the publication in an interview.

Without revealing when the company would apply for a banking licence, Circle’s chief said it would be “hopefully in the near future.”

Notably, Circle is the principal operator of the digital stablecoin USD Coin (USDC).

The USDC service was launched in 2018, which allows tokenisation of US dollars and facilitates their use over the internet and blockchain.

The risks associated with blockchain are a cause of concern for the US regulators, who have said that stablecoins need more regulations and should be issued by banks.  

Allaire said that the US Office of the Comptroller of the Currency has held talks with Circle over several topics such as interoperability between blockchains and the assessment of operational risks associated with the technology.

If Circle manages to clear the regulatory hurdles and secure a bank charter, it will become the fourth crypto bank in the country.

The news comes after Circle recently bagged $400m in funding from BlackRock, Fidelity Management and Research, Marshall Wace LLP and Fin Capital.

It believes, “that full-reserve banking, built on digital currency technology, can lead to not just a radically more efficient, but also a safer, more resilient financial system.”