From MarketWatch, October 31, 2025:
The Fed needs a 24/7 system for banks to move cash. This could be the answer.
Charlie Garcia responds to readers about ‘perpetual futures’ and stocks that could prosper from it
Editor’s note: Columnist Charlie Garcia shares select emails from his virtual mailbag every week.
Dear Charlie,
Your article positions Circle as a major beneficiary if USDC becomes the settlement layer for banking system intraday credit. But Circle is basically a money-market fund with tech wrapping. If they’re holding $500 billion to $1 trillion in Treasurys and rates move 100 basis points, that’s a massive duration risk.We lived through Silicon Valley Bank (SVB). I watched “safe” Treasury positions blow up when liquidity disappeared. Why wouldn’t Circle face the same disaster if they scale to Fed infrastructure levels? Or are you assuming they’d have Fed backstop facilities similar to the discount window?
Also, political question: Can you imagine [Sen.] Elizabeth Warren’s reaction when a private crypto company becomes systemically important to U.S. banking?
Patricia
Dear Patricia,
You’re asking the right question, which is why you’re in finance and not a crypto influencer with a YouTube channel.
Yes, Circle faces duration risk if it scales to the $500 billion to $1 trillion range. And yes, SVB should terrify anyone paying attention. But here’s the critical difference: SVB was a bank pretending to be a tech company. Circle is a tech company that would become, if my thesis plays out, a systemically important financial institution — whether they want to or not.
Circle gets Fed backstop facilities, discount-window access, FDIC insurance on USDC (or something functionally equivalent) and enough regulatory scrutiny that its compliance department becomes larger than its engineering team. It becomes a boring utility that happens to process a trillion dollars in settlements annually.
Will Circle’s executives like this? Probably not. Will they have a choice? No....
...MUCH MORE
And as we saw November 22, 2025:
Singapore: "SGX to List Perpetual Futures to Rival Crypto ‘Bucket Shops’"
Things are moving fast.
