- Ripple has applied for a bank license to meet requirements in the stablecoin bill, the GENIUS Act
- XRP’s market sentiment was significantly bullish after the update
Ripple is in the news today after it applied for a U.S bank license with the OCC (Office of the Comptroller of the Currency). The move is aimed at shoring up its regulatory moat amid intense stablecoin competition.
In an X post, Ripple CEO Brad Garlinghouse confirmed that the firm applied for a bank licence and a Fed Master account as part of its stablecoin plan. He said,
“This (Fed Master account) access would allow us to hold $RLUSD reserves directly with the Fed and provide an additional layer of security to future-proof trust in RLUSD.”
Source: Brad Garlinghouse/X
Ripple runs the RLUSD stablecoin alongside the XRP Ledger blockchain, all aimed at its payment vision.
The race heats up…
However, 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 30 June.
According to Circle’s CEO, Jeremy Allaire, the license would help “integrate digital assets” with the broader U.S financial system.
“Establishing a national digital currency trust bank of this kind marks a significant milestone in our goal to build 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.
Meanwhile, Caitlin Long of Custodian Bank clarified that most of the current applications are for trusts, and not banks.
However, former lawmaker John Deaton believes that Ripple would soon become a bank and offer crypto-backed loans, mortgages, etc.
Source: John Deaton/X
On the contrary, BitMEX Founder Arthur Hayes criticized this move, arguing that crypto firms can’t compete with seasoned TradFi players.
“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.”
As expected, this update juiced XRP bulls to push the altcoin to $2.3 at press time, bringing the altcoin to a key short-term target.
The market’s bullishness was illustrated by the weighted sentiment spike to a two-month high. The next medium target would be $2.6 if the momentum extends itself.
Source: Santiment
