Ripple Seeks National Bank Charter for Enhanced Regulatory Compliance

Ripple Labs has taken a significant step towards regulatory compliance and integration with traditional finance by applying for a national bank charter. This move follows a similar application by Circle Internet Group, indicating a broader trend among crypto firms to align with emerging US stablecoin regulations under the Office of the Comptroller of the Currency (OCC).

Ripple’s decision to pursue a national bank charter is a strategic effort to embed itself within the regulated financial ecosystem. This comes after the US Senate passed the GENIUS Act, which imposes clear regulatory standards on stablecoin issuers. By seeking this charter, Ripple aims to operate under comprehensive federal and state supervision, potentially setting a precedent for other crypto firms navigating the evolving regulatory landscape.

Ripple’s Ripple USD (RLUSD) stablecoin is already regulated by the New York Department of Financial Services, and the bank charter would further solidify its compliance credentials. This regulatory alignment is crucial as stablecoins face increasing scrutiny regarding reserve transparency and consumer protections.

Ripple’s application follows closely after Circle Internet Group’s submission to the OCC to establish a national trust bank. Circle’s USDC stablecoin, the second-largest by market capitalization, stands to benefit from enhanced regulatory clarity and trust once overseen by a national bank charter. Circle’s CEO emphasized the company’s proactive approach to aligning with forthcoming US regulations, underscoring a growing consensus among stablecoin issuers to embrace federal oversight.

Currently, Anchorage Digital remains the only crypto firm holding a national bank charter, making Ripple’s and Circle’s applications significant milestones in the maturation of crypto finance.

In addition to the banking charter, Ripple has applied for a Master Account with the Federal Reserve. This account would grant Ripple direct access to the US central banking system, allowing it to hold RLUSD reserves securely at the Fed. Such access is a critical step in enhancing the stability and trustworthiness of Ripple’s stablecoin, providing an additional safeguard against liquidity risks.

Ripple CEO Brad Garlinghouse highlighted that this move “future proofs” trust in RLUSD by integrating it more deeply into the traditional financial infrastructure. The application was submitted through Standard Custody, a crypto custody firm Ripple acquired in early 2024, demonstrating a strategic consolidation of regulatory and operational capabilities.

Ripple’s pursuit of a national bank charter and Federal Reserve Master Account marks a transformative moment for stablecoin regulation and crypto integration with traditional finance. By aligning with the GENIUS Act’s regulatory framework and enhancing oversight, Ripple is setting a new standard for trust and compliance in the crypto industry. This strategic approach not only bolsters market confidence in RLUSD but also signals a broader institutional acceptance of stablecoins as viable financial instruments underpinned by rigorous regulatory standards.