Blockchain payment company Ripple, is making another major move with its recently announced pursuit of a national bank charter in the United States, a move that its CEO, Brad Garlinghouse, unveiled on social media.
National Bank Charter And Fed Master Account
According to Reuters, securing a national bank charter would allow Ripple and other crypto firms to streamline their payment processes, reducing costs by eliminating the need for intermediary banks.
Moreover, such a designation would provide a crucial endorsement of legitimacy after years of operating in a regulatory gray area. The Office of the Comptroller of the Currency (OCC), a key banking regulator, has confirmed receipt of Ripple’s charter application, which will undergo rigorous scrutiny before any approval is granted.
In addition to the charter, Ripple is also seeking access to a Federal Reserve (Fed) Master account. This would enable the company to tap into the Federal Reserve’s payments infrastructure, allowing it to manage its stablecoin reserves directly with the central bank.
Ripple launched its stablecoin, RLUSD, in October of last year. Although it is considerably smaller than dominant players like Tether (USDT) and Circle (USDC), RLUSD has established itself as one of the largest stablecoins, boasting a market value of approximately $470 million.
Ripple Nears Resolution In SEC Legal Battle
This strategic move occurs at a pivotal time for Ripple, as the company appears to be approaching a resolution in its prolonged legal battle with the US Securities and Exchange Commission (SEC).
As reported by Bitcoinist, Garlinghouse indicated that both Ripple and the SEC are likely to withdraw their respective appeals, hinting at a potential end to a dispute that has spanned several years.
Interestingly, this shift could allow the blockchain payment company to refocus on its core mission: building the “Internet of Value,” as disclosed by Garlinghouse, a vision aimed at transforming global payment systems.
The outcome of Ripple’s legal battle could also pave the way for additional financial products linked to its associated cryptocurrency, XRP. With major asset managers expressing interest in exchange-traded funds (ETFs) that include XRP, the stakes are high for Ripple’s future in the financial landscape.
Notably, Circle has also announced its intention to establish a national trust bank in the US earlier this week, following its successful initial public offering (IPO).
Circle’s CEO, Jeremy Allaire, emphasized the company’s commitment to trust and compliance, stating that becoming a publicly traded company is a critical step in this journey.
As of this writing, XRP trades at $2.23, jumping little over 3% following Ripple’s announcement on Wednesday. This recovery puts the cryptocurrency 34% below its record high of $3,40.
Featured image from DALL-E, chart from TradingView.com
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