Ripple’s Bid for a National Trust Bank Charter Puts Stablecoin RLUSD Under Federal Spotlight

Ripple Labs Inc. has formally applied for a national trust bank charter with the U.S. Office of the Comptroller of the Currency (OCC), according to people familiar with the filing confirmed on Wednesday. If approved, the license would place Ripple’s U.S.-dollar-backed stablecoin RLUSD—currently supervised by the New York Department of Financial Services—under direct federal oversight, joining a select cohort of digital-asset firms that already hold, or are seeking, full OCC charters.

The move echoes earlier efforts by Circle (issuer of USDC) and follows Anchorage Digital’s precedent-setting 2021 trust charter, signalling that crypto-native companies increasingly view a banking licence as the cost of admission to mainstream finance.

Why a Trust Bank—And Why Now?

Unlike a full-service commercial bank charter, an OCC national trust bank licence is tailored for firms that safeguard client assets, clear payments and issue instruments such as stablecoins without engaging in retail deposit-taking or lending. For Ripple—whose flagship payment rail historically revolved around the XRP token—the charter would unlock three strategic capabilities:

  1. Reserve Efficiency and Transparency
    • Direct access to the Federal Reserve’s real-time payments network (via an eventual master account) could shorten RLUSD redemption windows from the current T+0.5 settlement to near-instant finality for dollar off-ramps—critical when the stablecoin’s daily turnover already averages $10 billion, or roughly 22.5× its float (see Methodology box).
  2. Regulatory Harmonisation
    • An OCC-supervised bank would be subject to the same fiduciary, custody and safety-and-soundness standards that govern trust divisions at BNY Mellon or State Street. That offers institutional clients a single federal compliance stamp, obviating the need to navigate 49 separate money-transmitter regimes.
  3. Balance-Sheet Optionality
    • Holding Treasury bills and reverse-repo collateral directly on the bank’s balance sheet could allow Ripple to sweep excess reserves into the Federal Reserve’s overnight RRP facility—converting RLUSD’s backing assets from today’s blended 4.8 % yield to a policy-rate-linked 5.15 %, widening net-interest margins without raising incremental credit risk.

RLUSD by the Numbers

Metric (30 Jun 2025) Value 1-Month Δ
Circulating supply $455 million ▲ 47 %
Daily on-chain transfer volume $10 billion ▲ 61 %
Average on-chain transfer size $42,350
Velocity (Volume ÷ Supply) 22.5×
Market-cap rank (stablecoins) #6 up from #11

Methodology. Daily volume is averaged across Ethereum and the XRP Ledger (XRPL) using anonymised node data; circulating supply reconciles Ripple’s 26 June attestation with chain-explorer balances. Velocity equals 10 billion ÷ 0.455 billion.

Bridging Retail Simplicity and Institutional Complexity

Roughly 80 % of RLUSD transfers are low-value B2C payouts (affiliate marketing, gaming rewards, remittances), but the remaining 20 % already sits squarely in professional terrain: corporate-treasury sweeps, on-exchange settlement, and wholesale FX “legs” between dollar–peso or dollar–yen corridors, according to Ripple’s unpublished Q2 On-Chain Insights memo. Those flows demand more than a feel-good peg—they require banking-grade assurances around capital, liquidity and operational resilience.

“The OCC charter is not about brand optics; it’s about giving tier-one banks a counterparty they can book under existing Basel III and SR 11-7 models without tweaking probability-of-default grids,” said one U.S. correspondent banker familiar with Ripple’s pitch deck who requested anonymity.

In plain English: once OCC-regulated, RLUSD held at Ripple Bank could count as a Level 1 High-Quality Liquid Asset—functionally equivalent to cash—when regulators perform a bank’s liquidity-coverage drill. That is a leap no state-chartered trust company can offer on day one.

A Regulatory Domino Effect

Ripple’s timing is not accidental. The Genius Act—a bipartisan stablecoin bill endorsed by Senators Gillibrand and Emmer—moved out of committee on 20 June and is widely expected to receive a floor vote before the August recess. The act would require all USD-stablecoin issuers exceeding $10 billion in liabilities to hold either a federal banking licence or a state special-purpose banking charter approved by the Federal Reserve.

Although RLUSD’s float is still well below that threshold, Ripple is signalling it would rather get ahead of the compliance curve than scramble later. The strategy mirrors Circle’s 2023 decision to park excess USDC reserves at BlackRock’s government money-market fund—a move that ultimately greased the wheels for Circle’s own pending trust charter.

Competitive Landscape: A Three-Horse Race

  1. Tether (USDT) – $113 billion market cap, 51 % share. Runs on offshore entities with limited U.S. exposure.
  2. Circle USD (USDC) – $62 billion, 28 % share. Seeking its own OCC trust charter; publishes monthly attestations.
  3. Ripple USD (RLUSD) – $455 million, 0.2 % share but fastest 6-month growth rate (≈420 %).

While RLUSD is dwarfed by incumbents, its growth trajectory and the potential for a fully federal banking framework set it apart. XRP Ledger hooks enable cross-currency atomic swaps, and Ripple Net’s 200-plus banking partners provide a captive distribution channel that newer entrants lack.

Risk Factors Investors Should Watch

Category Key Questions Why It Matters
Regulatory Will the OCC impose Basel-style capital buffers on stablecoin liabilities? Higher CET1 requirements could compress margins.
Liquidity Can RLUSD maintain a 1:1 peg during extreme dollar-funding squeezes? 2020’s repo turmoil showed how fast Treasury markets can seize.
Operational Resilience How will Ripple mitigate single-provider risk after the OCC email-system outage in May? A cyber breach at the regulator disrupted bank communications for two weeks.
Legal Overhang Does the ongoing SEC appeal in SEC v. Ripple (relating to XRP) create charter-approval headwinds? The OCC consults with the SEC on crypto-asset classifications.
Competitive Pressure Could PayPal’s PYUSD (forthcoming Europe launch) or a potential Amazon stablecoin eclipse RLUSD’s network effects? First-mover advantage may erode if Big Tech launches in 2026.

Scenario Analysis: Where Could RLUSD Be by Year-End?

Scenario (31 Dec 2025) Circulating Supply Daily Volume Implied Velocity Probability*
Bull Case — OCC charter approved in Q4; bank-to-bank corridors in LatAm come online. $1.2 billion $25 billion 21× 30 %
Base Case — Charter still pending; growth continues through fintech channels. $850 million $14 billion 16× 50 %
Bear Case — Regulatory delays; fee war compresses volumes. $600 million $7 billion 12× 20 %

*Author’s subjective probabilities based on historical charter timelines (12–18 months) and on-chain adoption curves.

Beyond Stablecoins: What an OCC Charter Unlocks

  1. Tokenised Deposits
    Ripple could issue short-dated dollar certificates—essentially “tokenised term deposits”—that meet FDIC pass-through insurance criteria, offering treasury clients a programmable-yield instrument.
  2. Real-Time Cross-Border Clearing
    By integrating with the FedNow Service and designating RLUSD as a settlement asset, Ripple could convert bilateral correspondent-banking flows into atomic gross-settlement events, mimicking the PVP (payment-versus-payment) structure SWIFT gpi is still piloting.
  3. Digital-Asset Custody for Institutions
    Under existing trust-bank rules, Ripple could hold bitcoin ETFs or tokenised Treasuries for hedge-fund clients alongside RLUSD reserves—diversifying fee lines and embedding RLUSD in prime-broker workflows.

Expert Views

Lisa Ellis, Senior FinTech Analyst, MoffettNathanson
“A bank charter shifts RLUSD from the ‘shadow payments’ segment into the regulated core. If Ripple can show SOC-2 Type II compliance and meet the OCC’s digital-asset risk matrix, they turn a regulatory moat into a balance-sheet moat.”

Simon Johnson, Former IMF Chief Economist
“Stablecoins that hold reserve-asset duration under 90 days and publish attestation reports monthly are effectively narrow banks. The charter codifies that structure; the bigger question is whether the Fed will exempt such banks from traditional deposit insurance if they abstain from fractional lending.”

What Comes Next?

  1. Public Comment Period (30 days). The OCC will solicit written feedback; community banks may lobby against tech competition.
  2. Inter-Agency Review (60–90 days). The Fed and FDIC weigh systemic-risk implications, cybersecurity plans and BSA/AML protocols.
  3. Conditional Approval. Ripple would then have 18 months to satisfy pre-opening milestones: capital contribution (likely $250 million), core-banking system validation, and third-party vendor audits.
  4. Full Launch. At that point RLUSD reserves shift inside the bank entity, and Ripple Bank begins posting call-reports like any other national association.

Given historical averages, the fastest plausible timeline sees conditional approval by Q1 2026. However, recent cybersecurity issues at the OCC have led some observers to predict extra scrutiny, potentially adding one or two quarters.

Bottom Line for Crypto Investors

Ripple’s charter application is more than regulatory housekeeping. It is a bid to anchor RLUSD in the prudential regime that governs trillion-dollar custodians—forcing competitors to follow suit or justify looser oversight. From a market-structure perspective, a federally chartered, tokenised dollar liability blurs the line between stablecoin and commercial-bank money, accelerating the tokenisation of real-world assets and cross-border micro-FX settlement.

For the average crypto enthusiast, the story is straightforward: a more transparent, bank-regulated RLUSD could offer cheaper on-chain dollars with fewer redemption anxieties. For professional investors, the nuance lies in capital efficiency: would you rather park repo-eligible Treasurys yourself, or outsource that to a federally regulated narrow bank that tokenises the exposure?

Either way, Ripple has placed its chips on the square marked “full banking supervision.” Whether regulators and the market agree that this is the optimal path forward will shape not only RLUSD’s trajectory but also the broader debate over how digital dollars should—or should not—fit inside the perimeter of the U.S. banking system.