Ripple has taken a groundbreaking step toward reshaping stablecoin compliance by applying for a national banking license with the U.S. Office of the Comptroller of the Currency (OCC). Concurrently, its subsidiary, Standard Custody & Trust Company, seeks a Federal Reserve master account, aiming to store RLUSD stablecoin reserves directly within the Federal Reserve system—bypassing commercial banks entirely.
Dual-Layer Regulatory Strategy
RLUSD is currently regulated by the New York Department of Financial Services (NYDFS). Ripple plans to overlay this with federal oversight, creating a "state + federal" dual-layer framework.
👉 Explore how Ripple's compliance strategy sets new industry standards
Key Benefits of a Banking License
- Nationwide coverage: Eliminates the need for state-by-state licensing.
- Direct Fed access: Enhances liquidity management and settlement efficiency.
- Expanded services: Enables trust, custody, and other financial offerings for institutional investors.
Jack McDonald, Ripple’s SVP, emphasized:
"This will redefine transparency and compliance benchmarks for stablecoins."
The GENIUS Act and Industry Shift
The pending Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS) mandates stablecoin issuers to become "licensed payment stablecoin entities" under federal or state oversight.
Competitive Landscape
- Circle and other rivals are also pursuing banking licenses.
- Regulatory advantage: Banks may become the de facto standard for stablecoin issuance.
FAQ Section
Why is Ripple’s Fed master account significant?
It ensures "central bank-grade security" for RLUSD reserves, boosting transparency and reducing counterparty risk.
How does this impact XRP holders?
While RLUSD operates independently, Ripple’s broader compliance strengthens institutional trust in its ecosystem, potentially benefiting XRP adoption.
What’s next for RLUSD?
Approval could position RLUSD as a benchmark for compliant stablecoins, attracting institutional capital.
👉 Learn more about Ripple’s regulatory milestones
Key Takeaways
- Banking license = streamlined compliance + Fed access.
- Dual-layer model merges state and federal oversight.
- GENIUS Act accelerates industry-wide banking adoption.
Ripple’s move signals a broader shift toward regulated stablecoins, aligning with global financial standards.