Written by: Pzai, Foresight News
On June 30, stablecoin issuer Circle submitted an application for a U.S. trust bank license to the Office of the Comptroller of the Currency (OCC) and plans to establish a national trust bank in the U.S.; on July 2, Ripple followed suit with its national bank license application, previously its subsidiary Standard Custody applied for a Federal Reserve master account, intending to directly custody RLUSD reserves. Within just four days, these two major stablecoin giants initiated a key compliance sprint in the U.S. financial regulatory system.
As one of the important financial strategies during Trump's term, the potential demand for stablecoin payments and U.S. Treasury bonds under the dollar system coincides. Now that the stablecoin industry is rapidly taking shape, why does the stablecoin industry favor U.S. licenses?
GENIUS Act Catalyst: Federal licenses become a threshold for survival.
The core driving force behind this license competition is the (GENIUS Act) (Guiding and Establishing National Innovation for U.S. Stablecoins Act) passed by the U.S. Senate in mid-June. This act systematically stipulates for the first time that stablecoin issuers must become 'licensed payment stablecoin issuers' and must meet federal or state regulatory requirements.
Two key provisions in the bill directly drove issuers' license application actions:
Custody asset isolation requirements
The reserves of compliant stablecoins must be independently custodied, prohibited from mixing with the issuer's own funds, and limited to investments in cash, short-term U.S. Treasury bonds, and other high liquidity assets, eliminating re-pledging or leverage operations.
In the event of issuer bankruptcy, reserve assets as trust property are prioritized for repayment to token holders, taking precedence over general creditors.
Financial institution qualification threshold
Issuers must hold federal (OCC/Federal Reserve/FDIC) or 'substantially equivalent' state licenses; unlicensed entities are prohibited from operating in the U.S.
Scaled regulatory supervision: Stablecoin issuance ≤ $10 billion can choose state licenses; exceeding limits requires mandatory upgrade to federal licenses, or downsizing must occur.
The GENIUS Act positions stablecoins as payment tools rather than investment products through two major designs: 'de-interesting' (prohibiting interest payments to users) and 'technical backdoors' (mandating built-in freeze/destroy functions), while also providing law enforcement agencies with compliance intervention channels.
As stablecoin issuers accelerate their integration into the mainstream financial system, the distinction between state and federal regulatory systems is profoundly reshaping the competitive landscape of the industry. The fragmented regulation of state licenses has led issuers into compliance dilemmas—taking Ripple's RLUSD as an example, even after passing the stringent BitLicense review from the New York State Department of Financial Services (NYDFS), it still needs to spend several months repeating applications for licenses in states like California and Texas, with each state requiring an application fee of $50,000 to $200,000 and establishing localized compliance teams. The fragmented regulatory standards among states also create operational inefficiencies: audit frequencies of reserve assets vary from quarterly to semi-annually, and disclosure standards differ significantly, while regulatory differences among states force stablecoin businesses to design 'to the lower end rather than the higher end.'
Ripple's OCC application further advances this time. It will be based on the existing regulatory framework of the New York State Department of Financial Services (NYDFS) and overlay federal-level OCC regulation, aiming directly at a dual regulatory framework of 'state + federal'. If its subsidiary obtains the Federal Reserve master account qualification, the RLUSD reserves will be directly held within the Federal Reserve system. Having reserves recorded at the federal level greatly reduces the cost of cross-domain compliance, and Ripple CEO Brad Garlinghouse also claims that this will establish a 'new benchmark of trust' for the stablecoin market.
The 2023 Silicon Valley Bank (SVB) crisis led to Circle being trapped with $3.3 billion in reserves at SVB, resulting in panic in the market and a temporary de-pegging of USDC, nearly collapsing market confidence. The core purpose of Circle applying for a national trust bank license is to obtain the qualification for self-custody of reserve funds, eliminating the need to rely on commercial banks for custody and completely removing the risk of a 'bank run contagion chain.'
The OCC not only achieves nationwide one-time access but also reshapes the industry ecology through a triple mechanism: stablecoin reserves are directly held in the central bank system, completely eliminating the risk of commercial bank failures and realizing real-time settlement; it also grants issuers SEC-certified 'qualified custodial' qualifications, allowing for the custody of tokenized stocks and bonds for institutional clients, enabling Circle to participate in the digital asset custody market; more importantly, the OCC automatically covers state money transmission licenses, uniformly applicable to its risk-weighted capital standards, avoiding regulatory universality issues arising from differences in state capital adequacy ratios.
The pursuit of banking licenses by stablecoin issuers is not a one-day effort but a culmination of years of compliance exploration. Taking Circle as an example, it successfully obtained the first electronic money institution (EMI) license under the EU MiCA framework on July 2, 2024, allowing it to issue USDC and Euro stablecoin EURC compliantly in 27 countries. In the Middle East, Circle has obtained the principle license from Abu Dhabi MSB, targeting key on-chain settlement scenarios for oil dollar.
The high-threshold license system constructed by local regulatory authorities has created a strong barrier to this high-cost compliance layout. For instance, the high capital requirements (350,000 euros) and operational reserves mandated by the EU MiCA have caused many small and medium-sized issuers to exit, while Circle has managed to seize the entry into the stablecoin market in the EU market with a population of 450 million, posing a dimensional reduction attack on competitors.
With the advancement of license applications, the positioning of stablecoins has upgraded from merely a medium of transaction to a core component of financial infrastructure. Circle's Chief Strategy Officer Dante Disparte bluntly stated that federal regulation would turn the company into a 'dollar chain executor', reshaping the global flow of dollars.
