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 were off their earlier highs but up 5%.

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.

The trust structure can also simplify regulatory requirements for international counterparties, Dante Disparte, Circle’s chief strategy officer, told CNBC.

“We think of ourselves as a pioneer in ensuring that — even from the very earliest days of stablecoins entering the stream of commerce — they ought to follow the norms for trust, transparency, safety, financial crime compliance and the rest,” he said. “Today’s announcement codifies that at the federal level.”

The charter also 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 since the passing of the GENIUS Act nearly a year ago, which established a federal framework for payment stablecoins. Under that law, large stablecoin issuers like Circle are required to obtain an OCC charter.

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 did not responded to a CNBC…

Shares of Circle surged after lawmakers over the weekend struck a compromise on the market structure bill known as the CLARITY Act, preserving stablecoin reward programs under certain conditions.

On Friday, key language in the proposed crypto legislation was updated to restrict crypto companies from paying savings account-like interest or yield to users on passive stablecoin deposits – leaving that function to traditional banks. However, the bill does allow rewards as usage-driven incentives that could be tied to activity like trading, transactions or staking, as expected.

The stablecoin issuer Circle closed 19.9% higher, while Coinbase, the main distributor of Circle’s USDC stablecoin, gained 6.1%. BitGo and Galaxy Digital rose 10.3% and 3.8%, respectively.

Bitcoin rose more than 1% to about $79,000, after the flagship cryptocurrency topped $80,000 over the weekend for the first time since January.

Earning yield, usually in the form of rewards, on stablecoins like USDC and others has been a key incentive for users to hold the coins – similar to the interest earned on cash sitting in a bank account. The revised language is a relative win for Circle and Coinbase. However, it could pressure smaller crypto platforms that have leaned heavily on high-yield deposit products to attract users.

The development also aligns with a wider industry shift away from return-seeking products and services and toward crypto’s use in upgrading financial infrastructure.

Most banks have yet to weigh in on the legislation, but Bank of America called it a net win for the sector.

“Across bank sub‑sectors, the CLARITY Act’s resolution of the stablecoin yield debate is a net positive,” Bank of America analyst Ebrahim H. Poonawala said in a note Monday. “It should alleviate concerns tied to deposit flight, reduce regulatory uncertainty, and allow banks to engage with digital‑asset infrastructure on more controlled terms.”

The crypto industry has so far had a favorable response to the development.

Coinbase CEO Brian Armstrong, who has been heavily involved in discussions around this bill on Capitol Hill and strongly in support of evening the playing field between crypto companies and banks, posted on X Monday morning, saying “Mark it up.”

—CNBC’s Michael Bloom contributed reporting

Coinbase received conditional approval from the U.S. Office of the Comptroller of the Currency, or OCC, to operate as a trust bank, the company said Thursday.

If finalized, the crypto exchange will be able to operate payment products in addition to its custody business under federal supervision, Coinbase’s chief legal officer, Paul Grewal, told CNBC.

“Over the long haul we will be able to explore, with the OCC, offering not just custody products but also other infrastructure products, particularly around payments, that we think will expand and extend crypto payments in all sorts of new and interesting and important directions,” Grewal said.

The company made clear it will not become a commercial bank, take retail deposits or engage in fractional reserve banking — the practice employed by big banks of keeping just a fraction of customers’ deposits in reserve while lending out the rest. Still, a trust charter would give it the legal authority, access to banking infrastructure and regulatory credibility to move, hold and settle money more efficiently — and perhaps set it up to compete more with PayPal or Square.

The approval is a preliminary agreement that Coinbase’s application meets key regulatory requirements, subject to fulfilling certain conditions before it can actually operate as a trust bank.

Coinbase would be regulated directly by the OCC, one of the three main federal banking regulators, rather than be subject to state-based regulation, which is a major pain point for companies in fast-moving industries like crypto.

Up until this point, that’s been “the only way to go about this,” Grewal said, nodding to President Donald Trump’s promise to make the U.S. the “crypto capital of the world” in his second term. The Biden administration before it famously maintained an anti-crypto stance that the industry believes hampered its growth and leadership on the global stage.

State-by-state regulation creates a headache for many fast-paced startups playing in the heavily regulated financial services space. Instead of a single rulebook, companies face 50 slightly different ones that can not only slow growth but also increase costs.

“We wouldn’t be pursuing this if we didn’t think there were important opportunities in crypto infrastructure, including payments, that lie ahead,” Grewal said. “The OCC’s conditional approval is an important recognition by the agency that they want to see those products and services, particularly around payments and custody, developed here in the U.S., first and foremost.”

Coinbase has established a payments strategy centered on making stablecoins — particularly Circle-issued USDC — a mainstream global payment method. Last year, it launched Coinbase Payments, a product for platforms and merchants that includes wallet integrations and stablecoin checkout. It also launched a payments protocol with Shopify built on its in-house blockchain, Base. Separately, it partnered with Shopify…

President Donald Trump has thrown his support behind crypto firms in their high-stakes battle with U.S. banks over whether they can offer interest-like returns on stablecoins.

Trump, in a social media post late Tuesday, ratcheted up pressure on banks to relent on the stablecoin yield issue.

That’s the key point of contention holding up passage in Congress of the Clarity Act, which is a companion bill to the Genius Act approved last year, setting up a framework for regulated stablecoins.

“The Genius Act is being threatened and undermined by the Banks, and that is unacceptable,” Trump said in his post. “They need to make a good deal with the Crypto Industry because that’s what’s in best interest of the American People.”

Coinbase shares surged as much as 11% in early trading Wednesday, while shares of JPMorgan Chase and Bank of America fell less than 1%.

While Trump’s decision to back the crypto industry could sway members of his Republican Party in the GOP-led Congress, it’s unclear whether his support is enough to ensure the bill’s passage. The move also raises fresh questions over potential conflict of interests, as the president and his family have reportedly generated hundreds of millions of dollars in wealth from interests in firms including the crypto platform World Liberty Financial.

The dispute between the industries centers on whether crypto firms like Coinbase can offer yields on stablecoins. While crypto companies see it as a consumer-friendly innovation that will let people earn money on their idle funds, banks have warned that the competing product could siphon trillions of dollars from their industry.

Executives from JPMorgan and Bank of America, the two largest American lenders by assets, have cited a Treasury study that indicated that banks could lose up to $6.6 trillion in deposits if stablecoins offered a yield.

That could destabilize some banks, especially smaller ones, and remove a source of funding for loans to businesses across the country. Allowing the less-regulated crypto industry to behave like quasi-banks could heighten systemic risk, banks argue; while crypto firms say that the risks are contained and that stablecoins backed by Treasuries will boost demand for U.S. debt.

“It can’t be, you have these people doing one thing without any regulation, and these people doing another,” JPMorgan CEO Jamie Dimon told CNBC’s Leslie Picker on Monday. “If you do that, the public will pay. It will get bad.”

In recent months, the president has hosted a series of White House meetings between the two sides in hopes of brokering a deal, but the banks haven’t relented, according to people with knowledge of the gatherings.

Now, he is explicitly putting his weight behind crypto.

“Americans should earn money on their money,” Trump said in…

Donald Trump Jr. on Wednesday called traditional banking a “Ponzi scheme” that effectively forced the Trump family to start its crypto venture World Liberty Financial after banks closed the family company’s accounts in early 2021.

“You know, we didn’t get into crypto because we were on the leading edge,” Trump Jr. told CNBC’s Sara Eisen on “Squawk on the Street” during an interview Wednesday at the World Liberty Forum.

“We got into it out of necessity,” Trump Jr. said at the event that is being held at the Mar-a-Lago club owned by his father, President Donald Trump, in Palm Beach, Florida. “They basically forced us into it.”

He and his younger brother Eric Trump blamed traditional banks for booting the Trump Organization’s hundreds of bank accounts on the heels of the Jan. 6, 2021, riot, during which supporters of his father stormed the U.S. Capitol while claiming the 2020 election results were invalid.

The brothers said banks also had “debanked” other, smaller clients because of their conservative politics.

“We’re trying to modernize finance,” Eric Trump said.

“We’re the most canceled people in the world in 2020, 2021,” Eric Trump said.

“And it’s really great to almost have this retribution, where all of a sudden we start pushing an agenda, our agenda is to modernize finance to [make sure] that can never, ever happen to anybody again,” he said.

The Trump family’s involvement in a crypto venture has drawn criticism, given the presence of the elder Trump in the White House, and his ability to shape policy that could affect the fortunes of that venture. Sen. Elizabeth Warren, D-Mass., has been among the leading critics.

Warren in early February blasted the reported $500 million purchase of a 49% stake in World Liberty Financial by the Abu Dhabi royal Sheikh Tahnoon bin Zayed Al Nahyan months before the United Arab Emirates and Tahnoon’s company were given access to the advanced AI chips by the Trump administration.

“This is corruption, plain and simple,” Warren said Feb. 1. “The Trump Administration must reverse its decision to sell sensitive AI chips to the United Arab Emirates.”

Donald Trump Jr. in the Wednesday interview said that for decades, the family had the ability “to call any banker in New York … and [get] a loan for a building.”

“And, you know, we just realized that we were sort of at the top of the Ponzi scheme that was banking,” Trump Jr. said. “If you didn’t have those connections, you didn’t get that benefit.”

He said that stablecoin like those of World Liberty Financial “democratizes the ability for people to transact, to do finance, to get loans for businesses that make sense, that didn’t exist.”

The World Liberty Forum touted itself in a press release as bringing “together an unprecedented assembly of leaders from global finance, technology, sports, media, and government for a day of high-level dialogue on the…

Amid the U.S. military intervention in Venezuela, locals rushed to secure their savings by converting their bolívares to dollar-pegged digital tokens called USDT. The timing of the attack may have been surprising to some, but Venezuelans subsequent embrace of stablecoins wasn’t.

From the Middle East to Latin America, ordinary people are turning to USDT to hide and preserve their wealth from authoritative regimes and shield themselves against hyperinflation. And now, with U.S. President Donald Trump threatening to intervene in local affairs in Colombia and Iran, that survival strategy could gain even greater traction.

“Stablecoins are better dollars, but the reason people get them is out of necessity and out of self-preservation,” Mauricio Di Bartolomeo, co-founder of digital asset lender Ledn, told CNBC.  “Wherever they have limitations around dollars flowing freely, stablecoins are going to bust through the door.”

Since 2014, the digital currency issued by stablecoin giant Tether has become increasingly common in Russia, Iran and other emerging economies, particularly in times of heightened political instability, according to Di Bartolomeo. Using USDT, people can send and receive remittances, protect their money from local currency debasement and pay for goods and services.