XRP News Today: BPI Opposes Ripple's Federal Charter Bid Over Fiduciary and Regulatory Concerns

Ripple’s application for a federal banking charter in the United States has sparked a regulatory showdown with traditional financial institutions, as the Bank Policy Institute (BPI)—a lobbying group representing 42 major U.S. banks—attempted to block the crypto firm’s licensing bid. The move, detailed by crypto analyst Paul Barron, highlights tensions between legacy banking systems and emerging crypto-native models. Ripple’s July 2, 2025, submission to the Office of the Comptroller of the Currency (OCC) sought a national trust bank charter, which would enable the firm to offer custody services, stablecoin issuance (via RLUSD), and direct access to the U.S. payment system through a Federal Reserve master account. However, BPI and the American Bankers Association raised objections, arguing the public review period of 2.5 weeks was insufficient for evaluating Ripple’s “novel and complex” proposal involving cryptocurrency operations [1].

Critics also questioned whether Ripple’s business model aligns with the legal definition of fiduciary activity required for a national trust charter. Unlike traditional trust banks that manage estates and trusts, Ripple focuses on digital asset custody, tokenization, and stablecoin payments, a distinction that has drawn regulatory scrutiny. The firm’s RLUSD stablecoin, launched in late 2024, has already gained traction for real-time settlements, positioning Ripple as a bridge between blockchain innovation and regulated finance. If approved, the charter would grant Ripple direct access to U.S. financial infrastructure, potentially accelerating cross-border transactions and challenging legacy systems like SWIFT [2].

The opposition reflects broader concerns about market dominance. Analysts like Barron suggest traditional banks view Ripple’s rise as a threat to their entrenched control over financial services. John Deaton, a legal commentator, argued that BPI’s lobbying efforts prioritize market share protection over compliance. This dynamic underscores a pivotal clash between innovation and legacy systems, with Ripple’s model representing a shift toward decentralized finance (DeFi) infrastructure. The firm’s On-Demand Liquidity (ODL) service, which uses XRP for cross-border payments, has already secured partnerships with over 300 institutions globally by mid-2025, with 40% of them leveraging XRP for transactions [3].

The outcome of Ripple’s application could set a regulatory precedent for crypto-native enterprises. A successful charter would validate XRP as a non-security utility token, accelerating its adoption in mainstream finance. Conversely, rejection would reinforce regulatory skepticism toward decentralized alternatives. This debate intersects with Ripple’s ongoing legal battle with the SEC, adding uncertainty to its expansion plans. The firm’s ability to navigate these challenges hinges on demonstrating compliance while maintaining the efficiency that attracts institutional partners.

The resistance from BPI also highlights competitive pressures in the cross-border payments sector. Rivals such as Stellar (XLM) and stablecoin networks are vying for market share, while central bank digital currencies (CBDCs) pose long-term threats. Ripple’s strategy to position XRP as a neutral bridge between disparate digital currencies and CBDCs requires regulatory cooperation. Its recent partnerships with entities like SBI Holdings and CBDC pilot programs signal a commitment to bridging traditional and digital finance. However, the attempted blocking of its banking license underscores entrenched resistance to structural shifts in the financial ecosystem.

Sources: [1] [Ripple's Banking License Update: Attempted Blocking](https://timestabloid.com/ripples-banking-license-update-attempted-blocking/) [2] [Binance Post](https://www.binance.com/en/square/post/27558928804802) [3] Derived from on-chain data and partnership reports referenced in the provided materials.