Ripple, Circle and BitGo secure conditional approval for US banking charters

Ripple, Circle, BitGo, Fidelity Digital Assets and Paxos have won conditional regulatory approvals that could clear a path for the crypto firms to operate as federally regulated trust banks in the United States.

The U.S. Office of the Comptroller of the Currency (OCC) said on Friday that it had conditionally approved a national trust bank charter for Ripple National Trust Bank. Ripple Labs is the U.S. crypto firm closely tied to the XRP Ledger.

Circle’s conditionally approved application for a national trust bank charter is tied to a new entity it has named First National Digital Currency Bank. "This important milestone will give the world’s leading institutions greater clarity and confidence to build on Circle’s platform as stablecoins and blockchain technology move rapidly into the mainstream," Circle CEO Jeremy Allaire said in a statement.

The OCC also conditionally approved applications for BitGo Bank & Trust, Fidelity Digital Assets, and Paxos Trust Company to convert "from a state trust company to a national trust bank," according to a statement.

Crypto firms like Circle and Ripple securing limited-purpose banking licenses would represent a massive boon to those eager to merger digital asset holding and trading with the world of traditional finance. Moves to get federal bank licenses come amid a friendly regulatory environment for crypto under the new Trump administration.

Although the firms won't be able to accept cash deposits or make loans if they secure the final approvals from the OCC, they would be able to hold customers' assets. "“New entrants into the federal banking sector are good for consumers, the banking industry and the economy,” Comptroller of the Currency Jonathan V. Gould said Friday.

Coinbase , Stripe-owned Bridge, and Crypto.com have also applied to become federally chartered banks in the U.S. Up until now, Anchorage Digital has been only the only federally charted crypto firm.

Circle's plans

A U.S. Office of the Comptroller of the Currency license would enable Circle to act as a custodian for its own reserves and hold crypto assets on behalf of institutional clients. However, the firm would not be able to take cash deposits or make loans like traditional banks.

Circle has long looked to apply for a U.S. bank charter, which could open the door to it operating like a traditional lender by offering services such as deposit-taking and loan issuance.

Ripple and RLUSD

Shortly after Circle applied in June, Ripple also applied for a banking charter. Acquiring a national banking charter would mean that the OCC would be tasked with regulating Ripple's stablecoin RLUSD.

Passed this year, the GENIUS Act requires stablecoin issuers to maintain strict reserve backing —primarily cash and short-dated Treasurys— and a national trust bank charter could provide a clear regulatory pathway for firms which want to issue and scale their stablecoins.

"True to our long-standing compliance roots, Ripple is applying for a national bank charter from the OCC. If approved, we would have both state (via NYDFS) and federal oversight, a new (and unique!) benchmark for trust in the stablecoin market," Ripple CEO Brad Garlinghouse said in July.