In a move to broaden its cryptocurrency offerings, Ripple, a leading digital asset company closely tied to the XRP Ledger network, has submitted an application for a federal banking license to the Office of the Comptroller of the Currency, as confirmed by a spokesperson. This license would enable the company to operate across state lines and expand its crypto services under federal oversight. Notably, Ripple is behind the $440 million RLUSD stablecoin, regulated by the New York Department of Financial Services, and also provides digital asset custody services. The news, first reported by The Wall Street Journal, has led to a 3% increase in the value of XRP, the native cryptocurrency of the XRP Ledger network, which is currently trading at $1.7879.
This development comes on the heels of Circle, the firm behind USDC, also applying for a similar license, indicating a trend among stablecoin companies to seek federal oversight as the U.S. advances legislation to regulate stablecoins and the broader crypto market structure.
The application is significant, given that the House of Representatives is currently reviewing the U.S. Senate's stablecoin bill.
Ripple's move is also noteworthy because it would allow the company to have both state and federal oversight, setting a new standard for trust in the stablecoin market, according to Ripple CEO Brad Garlinghouse. Furthermore, Garlinghouse revealed that the company has applied for a master account at the Federal Reserve through Standard Custody, a trust and custody firm acquired by Ripple last year.
If approved, this would enable Ripple to store its stablecoin reserves, such as U.S. Treasuries, directly with the central bank, thereby enhancing the security of its stablecoin, RLUSD. This is a milestone for crypto-focused firms, which have historically faced challenges in obtaining Federal Reserve accounts, as seen in the cases of Kraken and Caitlin Long's Custodia Bank.