Ripple Labs Seeks US Banking License for RLUSD Stablecoin

Ripple Labs, a prominent fintech firm, has initiated the process of applying for a US banking license. This strategic move is aimed at enhancing the trustworthiness of its RLUSD stablecoin and strengthening its integration within the traditional financial ecosystem. The application was confirmed by Ripple’s CEO, Brad Garlinghouse, in a July 2 post, following an earlier report. Garlinghouse stated that the company is seeking a license from the US Office of the Comptroller of the Currency (OCC).

According to Garlinghouse, this application is part of Ripple’s long-standing commitment to compliance and regulatory adherence. The move comes at a time when the regulatory landscape for stablecoins is evolving, with the US Senate recently passing the GENIUS Act. This legislation outlines standards that issuers of dollar-pegged tokens must follow, including oversight by the OCC for larger issuers.

If Ripple Labs successfully obtains the US banking license, it would set a new benchmark for trust in the stablecoin market. This is because the firm would be subject to both federal and state oversight, with the New York Department of Finance Services already regulating Ripple USD (RLUSD), the company’s stablecoin product. This dual regulatory framework would provide an additional layer of security and transparency, potentially boosting investor confidence in RLUSD.

Garlinghouse’s announcement comes just two days after Circle, the issuer of the second-largest stablecoin USDC, applied with the OCC to create a national trust bank. This license, if granted, would allow Circle to operate as a federally regulated trust bank, giving it direct access to the Federal Reserve’s payment systems. This development underscores the growing trend among stablecoin issuers to seek regulatory approval and integration with traditional financial infrastructure.

In addition to the banking license application, Ripple has also applied for a Master Account with the Federal Reserve through Standard Custody, a digital asset custody firm acquired by Ripple in February last year. If approved, this application would grant Ripple direct access to the US central banking system. This access would enable Ripple to hold RLUSD reserves directly with the Fed, further enhancing the security and trustworthiness of its stablecoin.

The application for a Master Account with the Federal Reserve is a significant step for Ripple, as it would allow the company to hold its stablecoin reserves directly with the central bank. This move is expected to provide an additional layer of security and trust for RLUSD, as it would be held in a federally regulated environment. This development is part of Ripple’s broader strategy to integrate more deeply with the traditional financial system and enhance the trustworthiness of its stablecoin products.