According to the Wall Street Journal, Ripple, a firm specialized in cross-border payment services via blockchain technology, has applied with the U.S. Office of the Comptroller of the Currency (OCC) for a national banking license on Wednesday. This marks a significant step towards solidifying Ripple’s position as a crucial part of the U.S. financial system, as it affords it increased regulatory oversight and enhanced capabilities.
The blockchain payment firm has established its reputation in the cryptocurrency industry by launching XRP, the world’s fourth-largest cryptocurrency, with a market capitalization exceeding $130 billion. It also launched a dollar-backed stablecoin, RLUSD, which has a market cap of around $470 million.
Ripple Wants National Banking License
Presently, the New York Department of Financial Services oversees Ripple’s RLUSD stablecoin. However, if the blockchain payment company’s application is granted, it could expand its regulatory oversight to involve the OCC. This reflects Ripple’s commitment to regulatory compliance, as it’ll mean dual oversight of the stablecoin from both federal and state levels.
Jack McDonald, senior vice president of stablecoins at Ripple, commented:
“The dual nature of that regulation would basically have set a new bar for transparency and compliance in the stablecoin market.”
He also explained that while investors from different sectors have fueled stablecoin growth, a handful of wealthy investment firms and institutions hold themselves back from stablecoin investment because it has limited regulatory oversight. Thus, a national trust bank charter would clear skepticism and boost investors’ confidence in the stablecoin market.
Crypto Firms Apply for Bank Charter
Circle, issuer of the world’s second-largest stablecoin, USDC, has also taken a similar step to Ripple’s. It has applied for a National Trust Charter with the U.S. OCC. The proposed bank would be called the First National Digital Currency Bank, N.A. On approval, Circle will manage its USDC reserves and offer crypto custodial services to eligible institutional clients.
Notably, the XRP issuer moved to purchase Circle on a $5 billion deal, but the stablecoin issuer turned down the offer, citing that Ripple undervalued the firm.
Meanwhile, Anchorage Digital is the only crypto asset manager in the US with a federal bank charter, providing custody solutions for institutional clients while ensuring regulatory compliance.
