A national trust bank charter would place Ripple’s U.S. dollar-backed stablecoin, RLUSD, within the remit of the OCC, as well as the state oversight through the New York Department of Financial Services to which it is already subject, The Wall Street Journal (WSJ) reported Wednesday.
“The dual nature of that regulation would basically have set a new bar for transparency and compliance in the stablecoin market,” Jack McDonald, senior vice president of stablecoins at Ripple, said in the report.
In a separate move, Ripple subsidiary Standard Custody & Trust Company applied for a Federal Reserve master account on Monday (June 30). This account would enable Ripple to custody the reserves for its stablecoin with the Fed and issue and redeem stablecoins outside normal banking hours, per the report.
Another cryptocurrency company, Circle Internet Group, said Monday (June 30) that it applied for a national trust charter and aimed to establish a national trust bank called First National Digital Currency Bank, N.A.
The company said in a press release that if the OCC approves the application, the bank would oversee the management of the reserve of the USDC stablecoin on behalf of Circle’s U.S. issuer and would offer digital asset custody services to institutional customers.
“By applying for a national trust charter, Circle is taking proactive steps to further strengthen our USDC infrastructure,” Circle Co-founder, Chairman and CEO Jeremy Allaire said in the Monday release. “Further, we will align with emerging U.S. regulation for the issuance and operation of dollar-denominated payment stablecoins, which we believe can enhance the reach and resilience of the U.S. dollar, and support the development of crucial, market neutral infrastructure for the world’s leading institutions to build on.”
Digital asset custody has started to capture the attention of both traditional institutional players and FinTech platforms alike, PYMNTS reported Tuesday (July 1).
Circle’s bank application underscores that crypto firms feel ready for the type of direct supervision and regulatory compliance standards as federally chartered institutions, the report said.
