Cryptocurrency firm Ripple Labs is pursuing a US banking charter, following stablecoin issuer Circle's similar move as crypto companies increasingly seek regulatory approval to strengthen ties with traditional finance.
Ripple Seeks National Banking License
Ripple CEO Brad Garlinghouse confirmed via social media platform X that the company has applied for a charter with the Office of the Comptroller of the Currency (OCC), the national bank regulator. This marks a significant step in the company's compliance strategy.
"Building on our longstanding compliance tradition, Ripple is applying for a national bank charter with the OCC," Garlinghouse stated. Approved licensing would establish "a new (and unique) benchmark for trust in stablecoin markets," as the company would face both federal and state oversight.
Key aspects of Ripple's application:
- Would enable direct oversight by federal and state regulators
- New York State Department of Financial Services already oversees Ripple USD (RLUSD) stablecoin
- Represents growing institutional adoption of crypto compliance frameworks
Following Circle's Regulatory Path
Ripple's application comes just two days after Circle, issuer of the second-largest stablecoin USDC, filed for a national trust bank charter to oversee its stablecoin reserves. This coordinated movement among major crypto players coincides with Senate progress on stablecoin regulation legislation.
The proposed GENIUS Act would:
- Establish standards for dollar-pegged tokens
- Place larger stablecoin issuers under OCC supervision
- Create clearer rules for stablecoin operations
👉 How major crypto firms are navigating banking regulations
Federal Reserve Master Account Application
In a strategic expansion of its financial infrastructure, Ripple has also applied for a Federal Reserve master account through its acquisition Standard Custody. This would grant the company direct access to the US central banking system.
Benefits include:
- Ability to hold RLUSD reserves directly with the Federal Reserve
- Enhanced security measures for stablecoin operations
- Greater integration with traditional financial systems
Garlinghouse noted: "This access would allow us to hold RLUSD reserves directly at the Fed, providing additional security safeguards for RLUSD's trust."
Market Response and XRP Performance
The announcement has positively impacted Ripple's native token:
- XRP price rose 3.2% following the news
- Reached 24-hour peak of $2.27 before stabilizing
- Current trading price around $2.24 (CoinGecko data)
This price movement reflects growing investor confidence in Ripple's regulatory strategy and its potential to bridge crypto and traditional finance.
Crypto Banking Landscape
Current state of crypto banking approvals:
- Anchorage Digital remains the only crypto company holding a national bank charter
- Multiple firms now pursuing similar regulatory status
- Regulatory environment becoming more defined through new legislation
👉 Understanding crypto banking frameworks in 2024
Frequently Asked Questions
Why is Ripple applying for a banking charter?
Ripple seeks to enhance its compliance credentials and operational capabilities, particularly for its stablecoin offerings, by obtaining federal banking oversight.
How would a banking charter benefit Ripple's operations?
The charter would allow direct access to Federal Reserve services, enable clearer reserve management for RLUSD, and improve institutional trust in their products.
What's the significance of the GENIUS Act?
This proposed legislation would establish comprehensive federal oversight of stablecoins, creating standardized rules for dollar-pegged cryptocurrency operations.
How does this affect XRP investors?
The move signals Ripple's commitment to regulatory compliance, potentially increasing institutional adoption and stability for XRP-related products.
When might Ripple receive charter approval?
Banking charter approvals typically take several months to over a year, depending on regulatory review processes and any required modifications to applications.
How does this compare to traditional bank applications?
Crypto firms face additional scrutiny regarding asset management and compliance programs, making their approval processes potentially more complex than traditional bank applications.