Ripple Seeks National Banking License Amid GENIUS Act

Ripple Labs, a leading crypto firm, has submitted an application for a national banking license in the United States. This move mirrors a similar application by Circle Internet Group, the issuer of the second-largest stablecoin, USDC. The decision by Ripple comes on the heels of the US Senate passing the GENIUS Act, a bill that establishes standards for offering US dollar-pegged stablecoins and places oversight of larger stablecoin issuers under the Office of the Comptroller of the Currency (OCC).

Ripple's CEO, Brad Garlinghouse, confirmed the application in a post on X, stating that the company is seeking a national bank charter from the OCC. If approved, this license would subject Ripple to both federal and state oversight, enhancing trust in the stablecoin market. Ripple's stablecoin, Ripple USD (RLUSD), is already regulated by the New York Department of Financial Services. Garlinghouse emphasized that this move aligns with Ripple's long-standing commitment to compliance and would set a new benchmark for trust in the stablecoin market.

In addition to the banking license, Ripple has also applied for a Master Account with the Federal Reserve through Standard Custody, a crypto custody firm it acquired in February 2024. This account would provide Ripple with direct access to the US central banking system, allowing it to hold RLUSD reserves with the Fed and add an extra layer of security to the stablecoin.

Ripple's decision to seek a banking license comes just two days after Circle applied to the OCC to create a national trust bank that would oversee its stablecoin reserves. Circle's co-founder and CEO, Jeremy Allaire, stated that the company was taking "proactive steps" to "align with emerging US regulation for the issuance and operation of dollar-denominated payment stablecoins."

Anchorage Digital is the only crypto firm that currently holds a national bank charter. Ripple's move to become a regulated bank is a strategic decision that could have far-reaching implications for the crypto industry. It demonstrates the company's commitment to compliance and its willingness to work within the regulatory framework. This approach could pave the way for other crypto firms to follow suit, leading to greater integration between the crypto and traditional finance sectors.

The application for a banking license by Ripple and Circle reflects a broader trend in the crypto industry, where firms are seeking regulatory clarity and legitimacy. The GENIUS Act, which lays out standards for stablecoin issuers, is a significant step towards this goal. By aligning with emerging regulations, these firms aim to deepen their ties with traditional finance and gain the trust of regulators and investors.