Ripple's Bank Charter Push Aims to Legitimize Blockchain in Traditional Finance

Ripple’s CEO Brad Garlinghouse has announced the company’s pursuit of a U.S. national trust bank charter, signaling a strategic shift to align with traditional financial systems and bolster XRP’s institutional adoption. The application, submitted to the Office of the Comptroller of the Currency (OCC), aims to position Ripple as a federally regulated entity capable of custodizing assets and integrating its blockchain technology into legacy banking frameworks. This move follows Ripple’s existing New York BitLicense and recent collaborations with the Federal Reserve, including a subsidiary’s application for a master account to store reserves for its RLUSD stablecoin. Garlinghouse emphasized the initiative’s focus on compliance, stating it would enhance trust in stablecoins and expand Ripple’s role in cross-border payments *Here’s How High XRP Can Reach if Ripple Gets a …*^[1].

The potential approval of the charter could catalyze XRP’s utility in institutional transactions. Analysts note that while Ripple’s On-Demand Liquidity (ODL) service currently uses XRP as a “bridge” for low-cost, rapid settlements, most banks avoid holding the token due to its volatility. Instead, Ripple’s broader adoption hinges on its settlement systems (RippleNet), which facilitate transactions without XRP exposure. However, a national trust bank charter may incentivize institutions to engage with XRP indirectly by legitimizing Ripple’s infrastructure, thereby increasing demand for the token as a settlement asset *Where Will XRP Be in 5 Years? - The Motley Fool*^[2].

Market reactions to the news have been mixed. XRP surged past $2.28 in early July 2025, driven by speculation that a banking charter could accelerate institutional adoption. Technical indicators suggest short-term bullish momentum, with the token breaking key resistance levels. However, long-term projections remain uncertain. The Motley Fool’s analysis highlights that while regulatory clarity could boost XRP’s price, the token’s volatility and the rise of stablecoins like RLUSD may dilute its role as a bridge asset. For instance, if RLUSD replaces XRP in ODL transactions, demand for the token could stagnate, limiting its price appreciation *Ripple's Bank Charter Ambitions Propel XRP Past $2.28 in July …*^[3].

Valuation models presented by The Crypto Basic offer divergent outcomes. An Institutional Utility Model estimates XRP could reach $10.91 if it captures 10% of SWIFT’s $150 trillion annual messaging volume. A RLUSD + Fed Access Model projects a $13.65 price target, assuming RLUSD mirrors USDC’s $32 billion market cap and XRP bridges half of its transfers. Tokenization and NVT models suggest further variability, ranging from $2.18 to $16.36, depending on market share in asset tokenization and transaction volumes *Contrasting Crypto Regulation: A look at the US and Brazil*^[4].

Critics caution that Ripple’s ambitions may face regulatory and market hurdles. The U.S. SEC’s recent drop of major crypto lawsuits, including those against Ripple, reflects a policy shift toward accommodation but does not guarantee approval for a bank charter. Additionally, Brazil’s aggressive stablecoin regulations—aimed at curbing risks like money laundering—highlight global divergences in crypto oversight, which could complicate Ripple’s cross-border strategies. While Brazil’s Central Bank has positioned itself as a regulatory leader, the U.S. remains fragmented, creating operational challenges for firms navigating both jurisdictions *Brazil Tightens Stablecoin Rules in Bold Move to Outpace US*^[5].