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Crypto giant Ripple is applying for a national bank charter in the United States following a similar move by stablecoin giant Circle.
A charter would allow crypto firms to settle payments faster and save costs by bypassing intermediary banks, while also boosting legitimacy after years of regulatory uncertainty.
Ripple's charter must be approved by the Office of the Comptroller of the Currency, a prominent banking regulator.
The fintech company is also seeking a Fed Master account, which would give it access to the Federal Reserve's payments infrastructure and allow it to hold its stablecoin reserves directly with the central bank.
Here's what's known so far
XRP enthusiast Wrathofkahneman informed the crypto community that Ripple’s OCC Banking License application is now accessible, with Volume 1 being the public release. The application offers some clues about Ripple’s intentions and structure to consider.
Wrathofkahneman went on to share his deductions from the public release of the Ripple banking license application. According to him, Ripple is applying to charter a limited-purpose OCC-regulated national trust bank, with a focus on B2B banking and infrastructure.
The Ripple application reads: "Ripple Labs acting as a sponsor proposes to form Ripple National Trust Bank, a de novo national trust bank to be chartered by the Office of the Comptroller of the Currency (the OCC)."
The Trust Bank will be headquartered in New York and will be a wholly owned subsidiary of Ripple Labs. Once chartered, it "will conduct activities that complement Ripple’s stablecoin (RLUSD) and other payments businesses, including management of stablecoin reserves and related fiduciary services."
The Trust Bank will have a five-member board of directors consisting of five organizers, including Ripple's Chief Legal Officer Stuart Alderoty. While no mention was made of XRP in the application, Wrathofkahneman speculates that nothing precludes future XRP integrations.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team