Ripple Seeks National Bank Charter for Enhanced Stablecoin Credibility

Ripple is making significant strides in its regulatory ambitions by applying for a national trust bank charter with the U.S. Office of the Comptroller of the Currency (OCC). This move is part of a broader strategy to enhance the credibility and custody standards of its stablecoin, Ripple USD (RLUSD). The proposed institution, Ripple National Trust Bank, would be headquartered in New York City and operate under direct federal supervision, offering digital asset custody and fiduciary services.

Ripple's application comes as the company seeks to deepen its regulatory footprint, following its announcement of a dual licensing model for RLUSD. This model combines state oversight by the New York Department of Financial Services (NYDFS) with potential federal regulation through the OCC. CEO Brad Garlinghouse highlighted the significance of this move, stating that it would set a new benchmark for trust in the stablecoin market by having both state and federal oversight.

This regulatory step is part of a broader movement by crypto firms toward bank charters, in anticipation of the GENIUS Act. This legislation sets federal rules for stablecoins, requiring full dollar backing, transparency, and compliance with anti-money laundering (AML) and know your customer (KYC) laws. The act has been passed by the Senate and is awaiting House approval. Ripple's subsidiary, Standard Custody & Trust Company, has also applied for a Federal Reserve master account, which would allow Ripple to hold RLUSD reserves directly with the Fed, providing an additional layer of security.

Ripple National Trust Bank's application for a national bank charter and Fed Master account is a strategic move to gain direct access to the Federal Reserve's payment systems. This access would eliminate the need for third-party banks, reduce operational costs, and streamline transactions. By holding its own reserves and managing transactions more efficiently, Ripple aims to bolster trust in RLUSD, making it a more attractive option for users and institutions. This move is particularly significant for the remittance market, where Ripple aims to disrupt the industry by offering a more efficient and cost-effective solution.

The national bank license, if granted, would provide federal backing for RLUSD, enhancing its credibility and stability. This development underscores Ripple's commitment to innovation and its efforts to integrate digital currencies into the mainstream financial system. As the application process unfolds, the financial community will be closely watching to see how this move impacts the broader stablecoin market and the future of digital payments.