Ripple's announcement—made in July via social media by CEO Brad Garlinghouse—reflects similar actions taken by Circle and BitGo. Analysts believe that the joint effort to obtain a national charter is focused on enhancing credibility and integrating more deeply into Main Street.
However, are these initiatives merely superficial enhancements? While national trust banks hold federal charters, they are not permitted to accept deposits or issue loans like traditional banks. Instead, their role is to safeguard assets, manage client funds, and provide relevant financial products, indicating that this strategy is primarily about vertical integration and minimizing dependence on third parties. Still, these changes act as a significant alert for the conventional banking industry. With a charter, digital asset companies could enjoy quicker settlement times and reduced costs, bypassing intermediary banks.
For some, the advance of blockchain-based digital companies should be viewed as a complementary force. "Entities driven by blockchain are no longer mere disruptors on the outskirts; they are now recognized custodians of value that can coexist with and enhance traditional banking systems," states Tim Chen, global strategy head at Mantle, a blockchain financial technology company. Nevertheless, Chen cautions that traditional banks must recognize that tokenization is swiftly altering the landscape.
"What used to necessitate intermediaries and protracted settlement processes can now be accomplished through a smart contract and a stable, regulated digital token," he adds.
The charter applications must receive approval from the Office of the Comptroller of the Currency, which is the highest banking regulator in the US. Ripple is also pursuing a Fed Master account that would grant access to the Federal Reserve’s payment system. If this request is approved, Ripple would be able to maintain reserves of RLUSD, its own stablecoin, with the central bank. Circle has submitted a similar request. Earlier this July, Bluechip, the agency that rates stablecoins, awarded RLUSD its highest rating.
President Trump’s supportive stance on cryptocurrency has encouraged the bold initiatives taken by crypto companies. In July, the administration enacted the GENIUS Act, which governs stablecoins. Additionally, two more crypto-related laws, the Clarity Act and the Anti-CBDC Surveillance State Act, are still awaiting approval.
