Ripple Submits Application for U.S. Banking License for XRP and RLUSD
Ripple is making significant strides into the realm of conventional finance. The firm associated with XRP has sought a national banking charter in the United States, with the goal of placing its RLUSD stablecoin directly under federal compliance. This is not merely a formality. It represents a tactical effort to solidify the foundation of RLUSD and pave the way for a more substantial presence within the financial ecosystem. If granted, the banking license for Ripple would permit the company to maintain RLUSD reserves directly with the Federal Reserve.
Ripple’s CEO, Brad Garlinghouse, publicly acknowledged the application, highlighting that RLUSD is already functioning under the oversight of New York’s financial authorities. Acquiring a national charter through the Office of the Comptroller of the Currency (OCC) would broaden this jurisdiction, merging state-level authorization with federal legitimacy. This also sends a clear message to investors, regulators, and institutions that Ripple intends for RLUSD to be taken with utmost seriousness.
The Broader Context of the Charter
So, what does this really entail? A bank charter would provide Ripple with the capacity to maintain reserves straight with the Federal Reserve. This eliminates the involvement of intermediary banks, streamlines operations, and enhances transparency. Furthermore, RLUSD could be settled more swiftly and reliably, particularly during evenings or weekends when conventional systems are inactive.
NEW: Ripple has applied for a U.S. National Bank License pic.twitter.com/cMoTtdTrlJ
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Ripple intends to utilize its subsidiary, Standard Custody & Trust Company, to pursue the required Fed master account. If this application is accepted, RLUSD reserves would transition from commercial banks to the central bank, providing enhanced protection and oversight. For a stablecoin aiming to compete with competitors like USDC and Tether, this could provide a significant edge.
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Ripple Is Not Alone
The timing is purposeful. Earlier this week, Circle—the entity behind USDC—also submitted an application for a national trust bank license. Circle is seeking to establish a completely regulated institution dedicated to digital dollars and tokenized assets. Both Ripple and Circle are following the same blueprint: advance into the regulated stablecoin sector before the rules become even more stringent.
Currently, Anchorage Digital is the only digital currency company with federal charter approval. Ripple’s move positions it to potentially be the next in line. As the GENIUS Act gains momentum in the Senate, regulation concerning stablecoins is becoming more than just a theoretical matter. Guidelines related to reserves, disclosures, and crypto holder safeguards are already being formulated.
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RLUSD’s Standing and Future Prospects
Launched in late 2024, RLUSD has rapidly achieved a market cap around $470 million. While that figure doesn’t currently challenge leading stablecoins, it certainly positions Ripple in the dialogue. A federal charter might provide RLUSD with the leverage required to attract banks, payment processors, and institutional investors.
Ripple also has ambitions that extend beyond RLUSD. The charter would allow for expansion into cross-border transactions and digital asset custody services, all under federal guidance. Should the OCC and Fed greenlight the application, Ripple could render these services on par with traditional banks in terms of crypto law.
What to Monitor
Approval is not assured. Securing the charter and a Fed account involves multiple agencies and will take months of scrutiny. Ripple is also grappling with ongoing legal disputes related to XRP, which could affect the decisions made by regulators. However, if the license is granted, Ripple is set to have one of the most robust compliance infrastructures within the stablecoin trading market.
This is not just a regulatory benchmark. It indicates that the stablecoin landscape is rapidly evolving, and only those willing to adhere to the regulations will succeed in scaling. Ripple’s strategic banking initiative is a bet that RLUSD is prepared for its next level of growth. The industry is keenly observing whether the prospective Ripple banking license will facilitate broader acceptance of RLUSD.
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Key Takeaways
- Ripple has sought a U.S. national banking charter to bring its RLUSD stablecoin under federal oversight.
- This initiative would enable Ripple to hold reserves directly with the Federal Reserve, enhancing transparency and settlement efficiency.
- Ripple’s charter pursuit coincides with similar applications from Circle, as both aim to navigate stricter stablecoin regulations proactively.
- If approved, Ripple could branch out into digital asset custody and cross-border payment operations under comprehensive federal oversight.
- With a current market cap of $470 million, RLUSD’s advances could enhance its competitiveness against leading stablecoins.
The post Ripple Files for U.S. Banking License for XRP and RLUSD appeared first on 99Bitcoins.
