Crypto firm Ripple has been granted conditional approval in its bid to secure a national trust bank charter from the Office of the Comptroller of the Currency (OCC)—the US federal regulator that supervises national banks and federal savings associations.
Ripple, together with four other crypto-related businesses, Circle, BitGo, Fidelity Digital Assets, and Paxos, won provisional agreement from the OCC despite opposition from Main Street banks.
The OCC tentatively approved Ripple, creator of the RLUSD dollar-backed stablecoin and XRP payment token, and Circle, issuer of the USDC stablecoin, to establish national trust banks. Elsewhere, the OCC also gave preliminary approval to BitGo, Fidelity Digital Assets, and Paxos, to convert from state-regulated trust companies to nationally regulated trust banks.
Analysts say the pushback from banking industry groups might be an overreaction. The American Bankers Association, Independent Community Bankers of America, and Bank Policy Institute argue that granting charters is a backdoor into the banking sector that poses a systemic risk.
“[The] decision by the OCC to grant conditionally five national trust charters leaves substantial unanswered questions,” said Greg Baer, president and CEO of the Bank Policy Institute, in a prepared statement. “Chiefly, whether the requirements the OCC has outlined for the applicants are appropriately tailored to the activities and risks in which the trust will engage.”
But national bank trust charters do not allow regulated entities to solicit deposits, offer checking or savings accounts, or access insurance from the FDIC [Federal Deposit Insurance Corporation], which underwrites most banking deposits in the US.
Despite the OCC’s provisional approval, crypto firms must still satisfy the OCC’s capital, risk, and governance standards before full approval is granted.
Meanwhile, Ripple has secured approval from Abu Dhabi’s financial regulator, permitting Ripple’s RLUSD stablecoin for use inside the Abu Dhabi Global Market (ADGM)—a financial center—as an Accepted Fiat-Referenced Token. Approval from the Financial Services Authority will place RLUSD alongside a small group of tokens approved for ADGM use. Earlier this year, RLUSD received approval from the Dubai Financial Services Authority and has recently expanded its Middle East footprint into neighboring Bahrain.
