Ripple Applies For A Banking License And Federal Reserve Master Account

Ripple Labs Inc., a San Francisco-based blockchain payments company, has applied for a national banking license with the U.S. Office of the Comptroller of the Currency (OCC) as confirmed by CEO Brad Garlinghouse and reported by multiple sources. This move aims to bring Ripple’s U.S. dollar-pegged stablecoin, RLUSD, under federal oversight, complementing its existing regulation by the New York Department of Financial Services (NYDFS).

If approved, the license would allow Ripple to operate as a federally regulated bank, bypassing state-by-state money transmitter licenses and enabling broader operations across the U.S. The application follows a similar move by Circle, the issuer of USDC, which applied for a national trust bank charter days earlier. Ripple’s RLUSD, launched in December 2024 with a market cap of approximately $440-$470 million, would gain enhanced transparency and compliance under OCC supervision, potentially setting a new standard for stablecoin regulation.

Jack McDonald, Ripple’s SVP of stablecoins, emphasized that this dual state and federal oversight would establish a benchmark for trust in the stablecoin market. Additionally, Ripple’s subsidiary, Standard Custody & Trust Company, applied for a Federal Reserve Master Account on June 30, 2025, which would allow Ripple to hold RLUSD reserves directly with the Federal Reserve, enhancing security and operational efficiency.

This aligns with Ripple’s strategy to integrate its blockchain-based payment solutions and stablecoin into mainstream finance, especially as the U.S. Senate’s GENIUS Act pushes for stricter stablecoin regulation. The move reflects a broader trend among crypto firms like Circle, Coinbase, and Paxos to seek banking licenses amid a shifting regulatory landscape, with Anchorage Digital being the only crypto firm currently holding a national bank charter.

A national banking license would place Ripple’s stablecoin, RLUSD, under federal OCC supervision, complementing its existing New York Department of Financial Services (NYDFS) oversight. This dual regulation could set a high standard for transparency, reserve management, and compliance, positioning RLUSD as a trusted stablecoin in a market where trust is critical, especially post-2022 crypto failures like TerraUSD.

Federal oversight could streamline Ripple’s operations by replacing the patchwork of state-by-state money transmitter licenses, reducing compliance costs and enabling nationwide scalability for RLUSD, which has a market cap of ~$440-$470 million as of July 2025. The license would align Ripple with competitors like Circle (USDC issuer), which also applied for a national trust bank charter. This move could intensify competition in the stablecoin sector, where USDC ($59 billion market cap) and Tether’s USDT ($112 billion) dominate.

RLUSD’s federal backing could attract institutional adoption, especially for cross-border payments, a key Ripple focus. Access to a Federal Reserve Master Account would allow Ripple to hold RLUSD reserves directly with the Fed, enhancing security, reducing counterparty risk, and signaling stability to investors and users. By pursuing a banking license, Ripple bridges decentralized finance (DeFi) and traditional banking, potentially legitimizing blockchain-based payments in the eyes of regulators and financial institutions.

This could accelerate adoption of Ripple’s payment solutions, leveraging its XRP Ledger for faster, cheaper cross-border transactions. However, it may require Ripple to adopt stricter controls, potentially alienating parts of the crypto community that value decentralization and minimal regulation. Ripple’s application follows a trend among crypto firms (e.g., Circle, Coinbase, Paxos) seeking banking charters, with Anchorage Digital as the only crypto-native firm currently holding one. A successful application could encourage more crypto companies to pursue federal charters, reshaping the industry’s regulatory framework.

The U.S. Senate’s GENIUS Act, emphasizing stricter stablecoin regulation, suggests Ripple’s timing aligns with a push for clearer rules, potentially giving it a first-mover advantage in a federally regulated stablecoin market. A federally regulated RLUSD could challenge Tether’s dominance, especially if concerns about Tether’s reserve transparency persist. It could also draw institutional investors wary of unregulated stablecoins, boosting Ripple’s market share.

The move may pressure traditional banks to innovate or partner with blockchain firms, as stablecoins threaten to disrupt legacy payment systems like SWIFT. The OCC and Federal Reserve may view Ripple’s application as a step toward integrating crypto into the regulated financial system, aligning with calls for consumer protection and financial stability (e.g., via the GENIUS Act). However, they may impose stringent capital, liquidity, and compliance requirements, which could limit Ripple’s operational flexibility.

Some crypto advocates may see Ripple’s pursuit of a banking license as a compromise of blockchain’s decentralized ethos, arguing it subjects the industry to excessive government control. Others may view it as a pragmatic step to gain legitimacy and drive mainstream adoption. Ripple’s current NYDFS oversight reflects a state-level approach, which is often more flexible but fragmented, requiring compliance with multiple state regimes. A national banking license would shift RLUSD to federal oversight, simplifying compliance but potentially introducing stricter standards.

This divide creates tension: state regulators like NYDFS may lose influence over Ripple, while federal regulators gain control, potentially leading to jurisdictional debates. For Ripple, federal regulation could reduce costs and complexity, but it risks alienating state regulators who have been early supporters of crypto innovation. Traditional banks may perceive Ripple’s banking ambitions as a threat, as RLUSD and Ripple’s payment solutions could bypass legacy systems, reducing banks’ transaction fees and market share in cross-border payments.

Conversely, some banks may see opportunities to partner with Ripple, leveraging its blockchain technology to modernize operations. The divide here is between competition and collaboration, with banks needing to adapt to stay relevant. Ripple’s move toward federal banking status aligns it more closely with centralized finance, which could alienate DeFi purists who advocate for permissionless, trustless systems. RLUSD’s federal oversight may be seen as a step away from blockchain’s original vision of decentralization, creating a philosophical divide within the crypto community.

However, Ripple’s hybrid approach—leveraging blockchain while seeking regulatory approval—could bridge this gap, appealing to both DeFi enthusiasts and institutional players. The public is divided on stablecoins and crypto banking. Some view stablecoins as innovative solutions for efficient payments, while others associate them with volatility and scams, fueled by high-profile crypto failures. Ripple’s banking license could bolster public trust in RLUSD, but skepticism about crypto’s stability may persist.

Ripple’s pursuit of a national banking license and Federal Reserve Master Account positions it to lead the stablecoin market with a federally regulated RLUSD, enhancing trust and scalability. It aligns with a broader industry shift toward regulatory integration, potentially reshaping the crypto-financial landscape. However, it deepens divides between regulators and crypto purists, state and federal authorities, traditional banks and crypto firms, and centralized and decentralized finance visions.