Crypto Kingpins Circle And Ripple Are Approved for National Trust Banks

Two major players in stablecoins, Circle Internet Financial Inc. and Ripple Labs Inc., received conditional approval Friday from the U.S. Office of the Comptroller of the Currency to establish national trust banks.

Both companies coveted the approvals as key to establishing confidence in stablecoins among consumers and businesses as they begin to use and accept the tokens and as regulations emerge to clarify their use. “The conditional approval of our trust bank charter represents a massive step forward…setting the highest standard for stablecoin compliance# with both federal and state oversight,” said Brad Garlinghouse, chief executive at San Francisco-based Ripple, in a statement.

The approvals also come as digital currencies like stablecoins have captured the imagination of businesses and lawmakers, a point not lost on the two companies following the OCC’s action. “This important milestone will give the world’s leading institutions greater clarity and confidence to build on Circle’s platform as stablecoins and blockchain technology move rapidly into the mainstream,” noted New York City-based Circle’s chairman and chief executive, Jeremy Allaire, in a statement.

The approval for Circle’s bank follows nearly six months after the company filed its application and after passage by Congress this summer of the GENIUS Act, legislation widely seen as boosting stablecoin acceptance by clarifying the U.S. government’s stance on the digital money.

In particular, Circle says, its First National Digital Currency Bank will complement regulatory oversight of the company’s USDC Reserve. USDC, Circle’s stablecoin, was launched in September 2018 and is the second largest stablecoin by market capitalization after Tether, according to CoinMarketCap, at $78.5  billion.

Ripple, too, cited safety in its announcement, stressing that the establishment of a national trust will subject its RLUSD stablecoin to federal oversight, adding to state oversight by the New York Department of Financial Services. Indeed, the announcement argues this “dual layer of regulation” is “something no other issuers can claim,” an advantage for Ripple. RLUSD ranks 59^th among digital currencies, at $1.027 billion in capitalization. Ripple also issues the XRP cryptocurrency, which ranks fifth.

Circle for its part has made no effort to hide its ambitions in stablecoins, as Allaire last month declared his company “intend[s] to be the leader” in this market, while “gaining share in digital-asset markets [generally] is a priority.”

Publicly held Circle last month reported a 66% jump in revenue year-over-year for its September quarter, to $740 million. Revenue for the first nine months rose 59%, to $1.98 billion. Its Circle Payment Network generated $3.4 billion in annualized volume for the quarter, with 29 participating financial institutions and some 500 in the pipeline.