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Ripple’s chief executive said Wednesday the company applied to the Office of the Comptroller of the Currency for a national bank charter to support its stablecoin, RLUSD, which it introduced in December.
The move, which Ripple chief executive Brad Garlinghouse announced in a post on the social-media site X, follows an application the San Francisco-based cryptocurrency firm made earlier this week for a Federal Reserve master account. That account, if approved, would allow Ripple to hold reserves for RLUSD “directly with the Fed,” Garlinghouse says in his post.
Ripple’s latest effort also comes only two days after another major stablecoin platform, Circle Internet Group Inc. announced it has applied to the OCC to form a national trust bank. If approved, the bank would manage the reserve for Circle’s stablecoin, USDC, under OCC supervision.
Ripple introduced RLUSD only seven months ago, but the token now ranks ninth among stablecoins with a market capitalization of $469.3 billion, according to a ranking by Coinmarketcap.com. By design, stablecoins are linked on a one-to-one basis to a national fiat currency, typically the U.S. dollar.
Ripple, which has already obtained oversight for its stablecoin from the state of New York, says seeking such regulatory approvals will help bolster confidence in the stablecoin market. At the very least, it will “provide an additional layer of security to future proof trust in RLUSD,” Garlinghouse says in his post.
The move also comes as Congress considers bills that seek to establish regulatory clarity at the federal level for the stablecoin market. One bill, the GENIUS Act, passed the Senate last week and is under consideration in the House of Representatives. The House, meanwhile, has crafted a rival bill, the Stable Act.
Action by Congress may bring regulatory clarity to a rapidly growing stablecoin market, but at the same time, “a lot of parties are getting involved,” notes Aaron McPherson, including front-rank payments processors like Fiserv Inc. and PayPal Holdings Inc. Fiserv announced last month it will work with Circle to develop products for banks and merchants that will be based on stablecoins. PayPal launched its stablecoin, PYUSD, in August 2023.
As for Ripple’s latest effort, “it will help to have a bank charter,” McPherson says. “It will help them to have a more direct role in the market instead of being just a supplier of software.”
