Ripple Seeks US Banking License

Ripple Applies for US Banking License

San Francisco-based Ripple, a prominent blockchain payments firm, has formally applied for a national banking license from the US Office of the Comptroller of the Currency (OCC). This application, filed on July 2nd, as reported by the Wall Street Journal, marks a significant step for Ripple and the broader cryptocurrency industry.

Key Takeaways

• Ripple joins other crypto firms seeking federal banking licenses, aiming for greater integration into traditional finance.
• The application extends beyond Ripple's stablecoin, RLUSD, hinting at broader crypto-based financial services under a national banking framework.

Ripple CEO, Brad Garlinghouse, stated that the application aligns with the company's commitment to compliance. He highlighted that if approved, Ripple would have both state and federal oversight, setting a new benchmark for trust in the stablecoin market.

Currently, Ripple's dollar-backed stablecoin, RLUSD, operates under the New York Department of Financial Services (NYDFS). Securing the OCC license would shift RLUSD's supervision to the OCC, offering potentially stricter but more transparent and compliant oversight.

Ripple's Standard Custody & Trust Company has also applied for a Federal Reserve master account. This move, according to Garlinghouse, will allow Ripple to hold RLUSD's dollar reserves directly with the Fed, enhancing security and transparency. This is particularly relevant given the ongoing efforts by US lawmakers to clarify stablecoin regulations.

Ripple is not alone in this pursuit. Other crypto companies like Circle, BitGo, Coinbase, and Paxos are also seeking bank-like status, highlighting a broader industry trend. Circle, for example, recently confirmed its application for a national trust bank charter. This movement toward greater regulatory compliance comes in the wake of events like the FTX collapse and the failures of Silvergate and Signature Bank.

While traditional finance initially distanced itself from crypto, the climate is shifting, opening doors for deeper integration. The race for federal banking charters, whether for full banking services or limited-purpose stablecoin issuance, represents a key development for the future of the crypto industry. Anchorage Digital remains the only crypto firm currently holding a federal bank charter, obtained in 2021.

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