Key Takeaways
- Ripple has applied for a national bank charter, signaling crypto’s push into financial mainstream.
- A federal charter would allow Ripple to directly manage its stablecoin RLUSD reserves and reduce reliance on intermediaries, strengthening its role in the traditional financial system.
- Circle has also filed to establish a national digital currency bank, reinforcing its USDC oversight.
- The GENIUS Act and favorable political climate are accelerating support for stablecoins and crypto banking.
- Federally chartered crypto banks could redefine who controls financial infrastructure.
Ripple’s Federal Banking Bid Signals Major Shift in Digital Finance
Ripple, a crypto payments company, has submitted an application to the U.S. Office of the Comptroller of the Currency (OCC) for a national bank charter. If approved, Ripple would become one of the few digital asset firms operating as a federally regulated bank.
Market analysts see Ripple’s charter application as a major step towards integrating cryptocurrency into mainstream finance. If the application is approved, then Ripple would follow strict compliance, capital, and consumer protection rules similar to conventional banks. A national charter would also allow Ripple to issue and redeem its stablecoin RLUSD with greater efficiency, while reducing reliance on intermediary banks.
XRP, the native cryptocurrency of the payment network, touched a three-week high of around $2.32.
What The Banking Charter Bid Entails
Ripple CEO Brad Garlinghouse announced on X that the company seeks dual regulatory oversight, saying federal approval would set “a new benchmark for trust in the stablecoin market.” Currently, Ripple operates its RLUSD stablecoin under the supervision of the New York Department of Financial Services (NYDFS), but the approval from OCC will establish unprecedented regulatory standards.
Since its launch, RLUSD has secured a $470 million market capitalization. Following the banking charter announcement, Ripple’s flagship cryptocurrency XRP surged more than 3%, reaching $2.26, reflecting strong investor confidence in the company’s strategy.
Ripple Advances Multi-Front Strategy
Ripple’s subsidiary, Standard Custody & Trust Company, simultaneously filed for a Federal Reserve master account. This move aims to enable Ripple to hold RLUSD reserves directly with the central bank, bypassing traditional banking intermediaries and allowing operations beyond standard banking hours. This can be a significant advantage in 24/7 crypto markets. Jack McDonald, Ripple’s senior vice president of stablecoins, said the move is essential for preparing Ripple to meet stricter federal compliance requirements while maintaining a competitive edge.
Circle Also Accelerates Banking Transformation
Circle Internet Group also filed a banking application on June 30, following its public offering that valued the company at about $44 billion. Circle aims to establish a National Digital Currency Bank to oversee USD Coin (USDC) reserves and offer institutional digital asset custody services.
Circle CEO Jeremy Allaire stressed the company’s proactive approach to stablecoin regulations, focusing on compliance with the GENIUS Act, which sets comprehensive standards for dollar-pegged tokens. Circle’s banking initiative addresses vulnerabilities exposed by the collapse of crypto-friendly banks like Silvergate and Signature Bank.
Trump Administration Signals a Promising Path Forward
President Trump’s return, accompanied by promises to position America as a “Bitcoin superpower,” has fostered a more favorable regulatory environment for digital asset integration. The Senate’s passage of the GENIUS Act provides clear frameworks requiring stablecoins to maintain liquid asset backing and submit monthly reserve disclosures.
Currently, Anchorage Digital stands as the only cryptocurrency firm holding a federal banking charter, which it earned in 2021 after significant investments in compliance and regulatory oversight. This exclusive status highlights the challenges crypto companies face in obtaining traditional banking integration.
Wall Street Welcomes Crypto Banking Evolution
These banking charter applications signal a fundamental shift in cryptocurrency industry strategy. Rather than operating in regulatory gray areas, leading firms are embracing comprehensive oversight to achieve mainstream financial system integration.
The moves could accelerate institutional adoption of digital assets. Federal banking charters provide the regulatory clarity and consumer protection assurances that many institutional investors require before engaging with cryptocurrency products.
Wall Street analysts have responded positively to these developments. Barclays, Bernstein, and Canaccord have issued bullish ratings on Circle stock with price targets exceeding $200, while J P Morgan and Goldman Sachs expressed measured optimism despite valuation concerns.
The race for banking legitimacy represents more than regulatory compliance. It’s a strategic positioning for the next phase of digital finance evolution. As traditional financial institutions increasingly integrate cryptocurrency services, federally chartered crypto banks could emerge as critical infrastructure providers bridging legacy finance and digital assets.
These applications will likely influence broader industry consolidation as smaller firms seek partnerships with regulated entities to access traditional banking services and institutional markets.
Read more: https://timescrypto.com/cryptobuzz/digital-assets/stablecoin/ripples-rlusd-stablecoin-gets-green-light-from-dubai-regulator/
