- Ripple applies for US bank license to control RLUSD stablecoin reserves.
- Brad Garlinghouse confirms OCC application, aims to boost trust and security.
- Ripple follows Circle’s move as GENIUS Act tightens stablecoin rules.
Ripple Labs is making big news in the crypto world. The company is now applying for a banking license in the United States. This move follows a similar decision by Circle Internet Group, which also wants a US banking license. Both corporations are interested in closer integration with traditional finance.
Ripple Seeks Bank License for RLUSD Dollar-Backed Stablecoin
The CEO of Ripple, Brad Garlinghouse, confirmed the news on his X account. He indicated that Ripple has already applied to the US Office of the Comptroller of the Currency (OCC). This update was first covered by the Wall Street Journal. This application demonstrates that Ripple is planning to establish additional confidence and security in the use of its services.
The WSJ reported that the main reason behind this shift is the Ripple stablecoin, RLUSD. This is a coin backed by the dollar, which was introduced last year. According to CoinMarketCap, RLUSD has a market cap of around $469 million today. It is currently under the regulation of the New York Department of Financial Services. However, Ripple seeks to have greater control. Having a banking license, Ripple would have the ability to directly maintain the cash reserves of RLUSD.
Moreover, this license can also benefit Ripple to provide additional crypto services in the future. Banking licenses are a source of entry to many crypto firms. This is not a plan that came about in a snap for Ripple. It is the strategy of a long-term program to win trust and follow the regulations.
What is more, Ripple has taken a step in the right direction. The US Congress is currently examining the GENIUS Act. The new act would compel the issuers of stablecoins to be bank-licensed or comply with tough regulations. Provided the law is introduced, it is expected that those companies that issue the dollar-backed tokens will only be monitored and licensed.
Ripple Eyes Bank License to Prove Serious Crypto Compliance
In this game, Circle has already made a step ahead. The firm is also in need of a banking license. It is optimistic that it will act as a bank to store its USDC stablecoin reserves. Jeremy Allaire the CEO of Circle admitted that the firm seeks to remain current in the new laws and be trusted.
Ripple wants to do the same. Besides the OCC license, Ripple has applied for a Master Account with the Federal Reserve. The special account would enable Ripple to keep the reserves of RLUSD at the Fed itself. According to Garlinghouse, the move will help create long-term confidence in the stablecoin issued by Ripple.
In a bid to make this a reality, Ripple is operating with Standard Custody. It is a crypto custody company that Ripple acquired earlier in the year 2024. The new ownership gives Ripple an easy time in dealing with assets in a safe manner.
Ripple does not have to worry even when it fails to receive the bank license. The GENIUS Act will permit non-bank companies to issue stablecoins as well. However, Ripple thinks that a banking license will enable it to distinguish itself from other companies. It desires to demonstrate to investors and regulators that it is serious about safety and compliance.
As a final point, the plan of Ripple to obtain a license to a bank is a massive shift. It demonstrates that crypto finance and traditional finance are becoming increasingly close to each other.
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