Ripple Labs is taking significant steps to enhance trust in its RLUSD stablecoin by applying for a national banking license. This move is part of a broader trend within the cryptocurrency industry, where companies are increasingly looking to regulatory compliance as a means of building credibility with users and investors.
A New Industry Benchmark?
On Wednesday, Ripple CEO Brad Garlinghouse confirmed via X that the company has submitted an application for a license with the Office of the Comptroller of the Currency (OCC), the U.S. national bank regulatory body.
“True to our long-standing compliance roots, Ripple is applying for a national bank charter from the OCC,” the post read.
If granted, this license would subject Ripple to dual oversight—state supervision by the New York Department of Financial Services (NYDFS) and federal oversight. This unique regulatory structure, according to Garlinghouse, could establish a new benchmark for trust in the stablecoin market.
Additionally, Ripple has requested a Master Account with the Federal Reserve, which would allow the firm to hold RLUSD reserves directly within the U.S. central banking system. This development is poised to add another layer of security and support long-term trust in Ripple’s stablecoin.
The application was submitted through Standard Custody, a crypto custody firm that Ripple acquired in February 2024.
“Ripple always has and will continue to build trusted, battle-tested and secure infrastructure. In a $250B+ market, RLUSD stands out for putting regulation first, setting the standard that institutions expect,” Garlinghouse stated.
Circle Applies for National Trust Bank
Ripple’s move comes just two days after Circle, the issuer of the USDC stablecoin, announced its own application to the OCC to establish a national trust bank named First National Digital Currency Bank, N.A. This initiative would empower Circle to directly custody the reserves backing USDC, eliminating reliance on external banking partners.
Circle Co-Founder and CEO Jeremy Allaire remarked that this step represents a significant leap toward creating a transparent, efficient, and accessible internet-based financial system. The aim is to bolster the infrastructure that supports USDC while aligning with emerging U.S. regulations for dollar-pegged stablecoins, which mandate issuers to maintain full dollar reserves and provide monthly reports.
These developments coincide with the progression of federal legislation known as the GENIUS Act, which recently passed in the Senate. The bill will need to clear the Republican-controlled House before it can become law, marking another crucial moment for regulatory oversight in the stablecoin sector.
The information in this post is excerpted from CryptoPotato.
