In a significant development, Ripple has secured conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) to operate as a national bank in the United States. This milestone is particularly noteworthy for Ripple’s RLUSD stablecoin, which now stands to benefit from enhanced regulatory oversight.
The OCC has included Ripple among five firms granted conditional approval for their national trust bank charter applications. Once Ripple meets certain conditions, it will join approximately 60 national trust banks currently under OCC supervision. This news comes shortly after Ripple initially submitted its application for a national banking license for its Ripple National Trust Bank, just over five months ago.
The OCC clarified that it employed the same rigorous review process it uses for all charter applications in issuing this conditional approval. The regulator emphasized that it will evaluate Ripple’s application based on its individual merits in alignment with relevant statutory and regulatory factors.
In a related development, the OCC also conditionally approved Circle’s application for its First National Digital Currency Bank. Additionally, BitGo, Fidelity, and Paxos have received approvals to transition from state trust companies to national trust banks.
Ripple’s CEO, Brad Garlinghouse, expressed his enthusiasm over the approval, calling it “huge.” He characterized the approval as a pivotal leap forward for the RLUSD stablecoin, setting rigorous standards for compliance with both federal and state regulations. Garlinghouse has used this occasion to challenge banking lobbyists who previously opposed granting national banking licenses to cryptocurrency firms, suggesting that their anti-competitive tactics are evident. He questioned their stance, especially since they had criticized the crypto industry for lacking regulatory clarity.
In its announcement, Ripple underscored how a dual layer of regulation could significantly enhance the RLUSD stablecoin’s adoption. The firm noted that as traditional finance becomes increasingly integrated into the cryptocurrency market, stakeholders will seek to utilize stablecoins that offer the highest levels of regulatory compliance and trustworthiness.
Final approval from the OCC is contingent on Ripple fulfilling all required pre-opening criteria. Once operational as a trust bank, Ripple will gain the capacity to provide various financial services, including payment and custody services. The firm will also be authorized to execute trades as agents and securely custody its reserves.
