Garlinghouse CEO: "Setting the Standards Institutions Expect"
Ripple Labs, the issuer of the cryptocurrency XRP (Ripple), announced that it has applied for a banking license with the U.S. federal regulator, the Office of the Comptroller of the Currency (OCC).
Brad Garlinghouse, CEO of Ripple Labs, stated on X (formerly Twitter) on July 2 (local time), "Ripple has applied for a national bank charter with the OCC." He added, "If approved, we will be subject to both state and federal oversight. This will set a new and unique standard for building trust in the stablecoin market."
Garlinghouse also announced that, through its subsidiary Standard Custody and Trust Company, Ripple has applied for a Federal Reserve master account. He explained that this would allow Ripple to directly hold and manage the reserves for its stablecoin, RLUSD, together with the Federal Reserve.
Garlinghouse emphasized, "In the stablecoin market, which exceeds $250 billion (about 340 trillion won), RLUSD is taking the lead in setting the standards that institutions expect by putting regulation first."
This move by Ripple is seen as a strategy to highlight that its stablecoin is subject to federal regulatory oversight, thereby aiming to secure greater trust from investors. RLUSD is already under the supervision of New York State, but obtaining a federal banking license could further enhance perceptions of its safety. Additionally, the Genius Act, a stablecoin regulatory bill pending in the U.S. Congress, stipulates that a banking license is a mandatory requirement for stablecoin issuers.
Stablecoins are cryptocurrencies whose value is pegged to specific assets such as the U.S. dollar to minimize price volatility. U.S. authorities require stablecoin issuers to hold safe assets, such as U.S. Treasury bonds, as collateral in order to ensure stability.
There is growing anticipation that the stablecoin market will experience explosive growth, as stablecoins enable fast and low-cost cross-border transfers of dollars without the need for currency exchange procedures. The Wall Street Journal (WSJ) reported on Ripple's application for a federal banking license, noting that "Ripple has joined the movement of cryptocurrency companies seeking to cross into mainstream finance."
According to WSJ, Anchorage Digital, a cryptocurrency custody firm, is currently the only digital currency-related company in the U.S. with a federal banking license.
Meanwhile, Circle, which was listed on the New York Stock Exchange last month, has also applied for a banking license. According to cryptocurrency information provider CoinMarketCap, Circle is the issuer of USDC, the second-largest stablecoin with a market capitalization of $62 billion. RLUSD, which Ripple launched at the end of last year, has a market capitalization of about $469 million.
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