Ripple has taken a big step toward entering traditional finance. On Wednesday, Ripple applied for a national banking license with the U.S. Office of the Comptroller of the Currency (OCC).
If Ripple gets the license, it can operate like a national bank in the U.S. This will allow the company to provide additional financial services, such as growing its stablecoin usage and potentially releasing other crypto-based products under federal oversight.
Ripple’s stablecoin, RLUSD, is backed by the U.S. dollar. It keeps its value stable by holding cash and safe government securities like U.S. Treasurys. Right now, it’s regulated by New York state, but a national banking license would bring it under federal supervision by the OCC too.
Jack McDonald, Senior Vice President of Stablecoins at Ripple, “The dual nature of that regulation would basically have set a new bar for transparency and compliance in the stablecoin market.”
Ripple also wants to directly connect with the Federal Reserve. Its subsidiary, Standard Custody & Trust Company, has applied for a Fed master account. If approved, Ripple could hold reserves directly at the Fed and issue or redeem stablecoins even during nights or weekends.
Right now, only Anchorage Digital has a federal bank charter, while Circle (issuer of USDC, the second-biggest stablecoin) has also applied. Ripple’s RLUSD is newer and smaller, with a market cap of about $469 million, compared to Circle’s $62 billion.
Also Read: Ripple Partners with OpenPayd to Boost RLUSD Payments
