Crypto Adoption Accelerates as Circle and Ripple Seek Banking Licenses

Crypto adoption is accelerating, with significant developments occurring even as other political and economic issues dominate headlines. One such development is the potential inclusion of an amendment in the Big Beautiful Bill to address taxation issues related to crypto miners and stakes, proposed by Senator Lummis. Although this amendment was not ultimately included in the bill, the fact that it was considered at such a high level of debate is seen as a positive sign for future tax alterations in the crypto sector.

In addition to the ongoing policy conversation, two major developments in the crypto landscape have gone relatively unnoticed. Circle, a stablecoin issuer known for its regulatory compliance, has applied for a national trust charter to operate under the name First National Digital Currency Bank. If approved by the OCC, this bank would oversee the management of reserve assets backing USDC and offer digital asset custody services to institutional customers. This move would also help Circle fulfill expected requirements of the GENIUS Act.

Similarly, Ripple, which recently issued the RLUSD stablecoin, has submitted an application for a national banking license. This application, if approved, would enhance the reporting, transparency, and compliance requirements for both Ripple and its native stablecoin. Interestingly, Ripple's application for a national banking license occurred almost simultaneously with the announcement that the firm was dropping its appeal against the SEC related to the long-running legal dispute between the firm and the SEC.

These moves by Circle and Ripple to enter the traditional banking sector indicate a growing trend of convergence between the TradFi sector and the crypto native sector. With these two leaders of the crypto space actively working to enter the TradFi banking sector, stablecoins look set for even larger adoption going forward.

Another significant development in the stablecoin sector is the embrace of stablecoins and other tokenized payments by payment giants Visa and Mastercard. Both companies have been involved in the crypto and stablecoin payment sector but have recently doubled down on these efforts. Visa is allowing banks to deploy tokens and stablecoin settlement directly onto its existing network, while Mastercard has expanded its partnership with Paxos, which has been growing since launching in September 2021.

These developments represent one of the most significant advancements in terms of crypto adoption. Instead of fighting against the trend toward tokenized payments and on-chain transactions, some of the largest payment processors in the world are actively embracing stablecoins and other tokenized payment solutions. This convergence between the TradFi sector and the crypto native sector is accelerating, and policy advocates and investors of all sizes would be well advised to keep a close eye on this progress.