Ripple Labs has applied to the Office of the Comptroller of the Currency (OCC) for a charter as a national trust bank. If the US GENIUS Act for stablecoins is adopted, that would mean it could choose for its RLUSD stablecoin to be federally regulated. Currently the stablecoin is issued via Standard Custody & Trust, a New York regulated trust bank. We explore the reasons for the application, and an issue related to Ripple Labs’ XRP holdings that could potentially scupper its chance of success.
On X Ripple CEO Brad Garlinghouse said, “if approved, we would have both state (via NYDFS) and federal oversight, a new (and unique!) benchmark for trust in the stablecoin market.”
The obvious question is: why have two banking charters? The simple answer is to hedge its bets and if Ripple believes the stablecoin will grow quickly, it will need to be OCC regulated sooner rather than later.
Ripple has always been keen to serve institutions, and being a national bank would bring added credibility. It already has a solid legal structure with Standard Custody & Trust, which ringfences the stablecoin reserves. We reported on Tuesday that Standard Custody had applied for a master account – a bank account at the Federal Reserve.
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