Circle and Ripple Opt for Dual Trust Structure in Stablecoin Issuance

The USDC stablecoin issuer Circle has received a trust charter from the New York Department of Financial Services (NYDFS). This move provides greater legal certainty around stablecoin holder protections. The NYDFS charter will remain as the stablecoin issuer, while directing the national trust to manage reserves and provide custody.

Circle's OCC trust can provide custody to affiliates, whereas Ripple has broader approval to also provide cryptocurrency custody to non-affiliated institutions. Ripple acquired Hidden Road Partners, which now forms part of its prime brokerage offering, giving it a standalone commercial reason for the two-entity structure.

The dual trust structure is not unique to Circle and Ripple; Paxos is keeping a single trust structure and converting its NYDFS trust into a national trust.