Ripple Seeks Federal Banking License for RLUSD Stablecoin

Ripple has taken a significant step towards enhancing its regulatory standing in the United States by applying for a national banking license from the Office of the Comptroller of the Currency (OCC) and a Federal Reserve master account. This strategic move is aimed at transitioning Ripple from a crypto-native firm to a federally regulated financial institution, thereby strengthening the credibility of its RLUSD stablecoin.

Ripple's application for a national bank charter and a Federal Reserve master account through its subsidiary, Standard Custody, aligns with the recently passed GENIUS Act. This Senate bill places regulatory responsibility for large stablecoin issuers under the OCC, providing a clear framework for stablecoin oversight. By seeking federal and state oversight, Ripple aims to expand its operations connected to RLUSD, which is currently regulated at the state level by the New York Department of Financial Services.

Ripple's CEO, Brad Garlinghouse, emphasized that this application sets a new standard for trust in the stablecoin market. He highlighted that having federal and state regulations demonstrates Ripple's commitment to following rules and building long-term trust in RLUSD. Garlinghouse also mentioned that Ripple wants RLUSD to stand out as the stablecoin market continues to grow. The token, valued at around $470 million, is expected to see increased demand if Ripple secures the federal charter.

The application for a Federal Reserve master account could significantly enhance Ripple's goals. Experts believe that direct access to the Fed’s payment system would enable Ripple to handle RLUSD transactions faster, more safely, and with greater reliability. Garlinghouse explained that holding RLUSD reserves directly with the central bank would strengthen security and build long-term trust in RLUSD. This move follows Circle's similar filing, indicating growing competition among major U.S. stablecoin companies seeking to fully comply with federal regulations.

Ripple's strategic timing is seen as a hedge against regulatory uncertainty. The GENIUS Act provides clear rules for stablecoins, and there is increasing interest from U.S. lawmakers and financial firms in digital assets. By applying early, Ripple ensures it remains compliant and competitive as new regulations take shape. This move also strengthens Ripple's bid for a national banking license, positioning it as a key player in the U.S. payment systems and underscoring the importance of stablecoins in its future plans.

If approved, Ripple would be among the few crypto firms with a federal bank license and a Fed master account. This would position Ripple to provide fully regulated stablecoin services, making its efforts more of a necessity than a choice in a future where stablecoin issuers face the same rules as banks. The application is seen as one of the most aggressive and strategic moves in the industry, potentially redefining stablecoin trust and oversight in the U.S.