DL News
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Ripple and Circle are applying to become banks — here’s why that matters
It may be hard to believe, but two of crypto’s biggest stablecoin issuers want to become banks.
Ripple, the company that issues RLUSD, and Circle, responsible for stablecoin USDC, have both applied for US National Trust Bank charters, a rare move that if approved would bring them under federal oversight, and closer to the heart of the US financial system.
The charters would place both companies under the purview of the Office of the Comptroller of the Currency, subjecting them to the same capital, liquidity, and risk standards as traditional banks.
That matters for crypto, said Chris Colson, payments guru at the Atlanta Federal Reserve, mainly because it suggests that stablecoins would truly enter the financial mainstream.
“A trust charter could enhance trust in USDC and RLUSD safety and oversight,” he said on LinkedIn on July 3.
“It potentially paves the way for broader institutional and cross-border adoption.”
Direct access
Getting approved for a bank charter is a huge deal in crypto, where regulatory clarity has been murky and quite hard to come by.
National bank charters offer more than just prestige. They provide direct access to the US financial system.
National trust banks don’t take deposits or offer lending, however, so they sidestep some of the Fed’s strictest rules and capital requirements.
Still, acquiring a charters would allow these companies could serve as federally regulated custodians, hold stablecoin reserves on their own books, and potentially tap into the Fed’s real-time payment systems.
Incumbents tremble
Approval also means big competition for incumbent banks, Colson said.
“Circle and Ripple’s move blurs the line between fintech and traditional banking,” he said. “It introduces a new kind of competitor — one offering programmable, blockchain-native money but operating under similar rules.”
The OCC has historically been hesitant on crypto, denying Kraken’s application for a bank license in 2023. But now sentiment has changed.
As the Genius Act wiggles its way through Washington D.C., and new leadership at the OCC under Trump-appointed regulator Rodney Hood, crypto companies are racing to get ahead of the curve.
In the first days of his tenure, Hood took action to reaffirm that a range of cryptocurrency activities are permissible in the federal banking system.
‘Absolutely fascinating’
For Chris Perkins, president of crypto VC firm CoinFund, the bank license will form the backbone of compliant issuance under the Genius Act.
And he didn’t shy away from how bullish this is for Ripple.
“It’s been absolutely fascinating how Ripple has been acquiring licenses. I think they’re a force to be reckoned with,” Perkins told DL News.
“They’re putting together all the elements to build a very successful and scalable stablecoin in RLUSD.”
Unlike Circle, whose stablecoin USDC forms the backbone of DeFi and led the company to a blockbuster IPO, Ripple’s stablecoin, RLUSD, has grown at a sluggish pace.
It now ranks 20th among all stablecoins by market value with $469 million.
Evolve or die
The stakes are as high as they’ve ever been.
Circle, which recently went public, holds over $60 billion in reserves to back USDC — and currently relies on traditional custodians like BNY Mellon to manage its assets.
A national trust charter would allow Circle to oversee those reserves directly and streamline custody for its institutional clients.
Ripple, meanwhile, has already applied for access to the Federal Reserve’s master account, a move that would let it settle payments directly on Fed rails — a rare privilege even among fintechs.
“It’s evolve or get left behind,” Jeff Cantwell of Seaport Research Partners reportedly said. “And clearly, that’s how Circle and Ripple are seeing things right now.”
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at [email protected].
Ripple, the company that issues RLUSD, and Circle, responsible for stablecoin USDC, have both applied for US National Trust Bank charters, a rare move that if approved would bring them under federal oversight, and closer to the heart of the US financial system.
The charters would place both companies under the purview of the Office of the Comptroller of the Currency, subjecting them to the same capital, liquidity, and risk standards as traditional banks.
That matters for crypto, said Chris Colson, payments guru at the Atlanta Federal Reserve, mainly because it suggests that stablecoins would truly enter the financial mainstream.
“A trust charter could enhance trust in USDC and RLUSD safety and oversight,” he said on LinkedIn on July 3.
“It potentially paves the way for broader institutional and cross-border adoption.”
Direct access
Getting approved for a bank charter is a huge deal in crypto, where regulatory clarity has been murky and quite hard to come by.
National bank charters offer more than just prestige. They provide direct access to the US financial system.
National trust banks don’t take deposits or offer lending, however, so they sidestep some of the Fed’s strictest rules and capital requirements.
Still, acquiring a charters would allow these companies could serve as federally regulated custodians, hold stablecoin reserves on their own books, and potentially tap into the Fed’s real-time payment systems.
Incumbents tremble
Approval also means big competition for incumbent banks, Colson said.
“Circle and Ripple’s move blurs the line between fintech and traditional banking,” he said. “It introduces a new kind of competitor — one offering programmable, blockchain-native money but operating under similar rules.”
The OCC has historically been hesitant on crypto, denying Kraken’s application for a bank license in 2023. But now sentiment has changed.
As the Genius Act wiggles its way through Washington D.C., and new leadership at the OCC under Trump-appointed regulator Rodney Hood, crypto companies are racing to get ahead of the curve.
In the first days of his tenure, Hood took action to reaffirm that a range of cryptocurrency activities are permissible in the federal banking system.
‘Absolutely fascinating’
For Chris Perkins, president of crypto VC firm CoinFund, the bank license will form the backbone of compliant issuance under the Genius Act.
And he didn’t shy away from how bullish this is for Ripple.
“It’s been absolutely fascinating how Ripple has been acquiring licenses. I think they’re a force to be reckoned with,” Perkins told DL News.
“They’re putting together all the elements to build a very successful and scalable stablecoin in RLUSD.”
Unlike Circle, whose stablecoin USDC forms the backbone of DeFi and led the company to a blockbuster IPO, Ripple’s stablecoin, RLUSD, has grown at a sluggish pace.
It now ranks 20th among all stablecoins by market value with $469 million.
Evolve or die
The stakes are as high as they’ve ever been.
Circle, which recently went public, holds over $60 billion in reserves to back USDC — and currently relies on traditional custodians like BNY Mellon to manage its assets.
A national trust charter would allow Circle to oversee those reserves directly and streamline custody for its institutional clients.
Ripple, meanwhile, has already applied for access to the Federal Reserve’s master account, a move that would let it settle payments directly on Fed rails — a rare privilege even among fintechs.
“It’s evolve or get left behind,” Jeff Cantwell of Seaport Research Partners reportedly said. “And clearly, that’s how Circle and Ripple are seeing things right now.”
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at [email protected].
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
