It may be hard to believe, but two of crypto’s largest stablecoin issuers are seeking bank charters.
Ripple (issuer of RLUSD) and Circle (issuer of USDC) have both submitted applications for US National Trust Bank charters.
If approved, this would place both companies under the purview of the Office of the Comptroller of the Currency (OCC), subjecting them to prevailing capital, liquidity, and risk standards applicable to traditional banks.
Chris Colson, payments specialist at the Atlanta Federal Reserve, suggests this move signals a significant step towards stablecoins gaining mainstream acceptance within the US financial system.
“A trust charter could enhance trust in USDC and RLUSD safety and oversight,” Colson stated on LinkedIn on July 3.
“It potentially paves the way for broader institutional and cross-border adoption.”
A Path to Financial System Integration
OBTaining a national bank charter is a significant development in the crypto sector, where regulatory clarity has been historically lacking.
While national trust banks differ from traditional banks in not accepting deposits or offering lending, they offer direct access to the US financial system under federally regulated status.
This approval would permit Circle and Ripple to operate as federally regulated custodians, holding stablecoin reserves on their own books and gaining access to the Fed’s real-time payment systems.
Challenging Incumbents
The move introduces significant competition for established banks, blurring the lines between incumbent financial institutions and fintechs.
Colson highlighted this point, stating, “Circle and Ripple’s move blurs the line between fintech and traditional banking,” creating a “new kind of competitor” governed by the same operational rules.
The OCC, led currently by Trump-appointed regulator Rodney Hood, has become more receptive, confirming that various crypto activities are permissible within the banking system.
For Chris Perkins, President of crypto VC firm CoinFund, the charter would underpin stablecoin issuance compliant with the Bank Holding Company Act.
A Question of Market Position
The timing of these applications also reflects intense market competition. While Circle’s market-leading USDC ($60 billion+ reserves) enjoys strong institutional adoption, Ripple’s RLUSD struggles, holding a mere $469 million in market value and ranking 20th overall.
For Circle, a bank charter holds particular value as it recently spun off USDC reserves into a publicly traded entity. It would enable direct management of these reserves, potentially streamlining operations with major custodians like BNY Mellon.
Ripple, already demonstrating significant ambition by seeking access to the Fed’s master account, appears equally determined, seen by observers like Jeff Cantwell of Seaport Research Partners as an “evolve or get left behind” scenario.
