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Ripple has applied for a bank license to meet requirements in the stablecoin bill, the GENIUS Act, and it’s likely to mark a significant step towards crypto’s invasion of Wall Street.
In an X post by Ripple CEO Brad Garlinghouse, he confirmed that the company has applied for both a bank licence and a Fed Master account as part of its stablecoin plan. According to him, this access would enable them to hold RLUSD reserves directly with the Federal Reserve and provide an additional layer of security to future-proof trust in RLUSD.
The move is aimed at shoring up its regulatory moat amid intense stablecoin competition. Ripple runs the RLUSD stablecoin alongside the XRP Ledger blockchain, all aimed at its payment vision.
The rush for a national bank charter application is part of the requirement within the stablecoin bill, the GENIUS Act. The bill recently passed by the Senate and currently in the House mandates that a firm must be a chartered non-bank, U.S bank, or credit union to be able to issue stablecoins in the United States.
In fact, Circle, another stablecoin issuer, made a similar application on June 30. According to Circle CEO Jeremy Allaire, the license would help “integrate digital assets” with the broader U.S financial system. He claimed that establishing such a national digital currency trust bank would mark a significant milestone in their goal of building an internet financial system that is transparent, efficient, and accessible.
Other potential stablecoin issuers or facilitators like Erebor and Wise have also applied for a similar bank license. However, as of press time, only Paxos and Anchorage Digital Bank had their applications approved.
On the other hand, Caitlin Long, Custodian Bank clarified that most of the current applications are for trusts, not banks. Nonetheless, former lawmaker John Deaton is convinced that Ripple would soon become a bank and offer crypto-backed loans, mortgages, etc., which will be a massive shift in the financial landscape.
In stark contrast, BitMEX Founder Arthur Hayes criticized this move, arguing that crypto firms can’t compete with seasoned TradFi players. He said, “If a crypto firm becomes a bank, it must comply with banking rules. That means the government wins. You can’t outcompete JPMorgan at their own game—especially when the game is rigged in their favor.”
The market has responded positively to this news, sending XRP prices up to $2.3 at press time, as the weighted sentiment spike to a two-month high reflects the increased optimism.
Source: ambcrypto.com
