Analysis: Ripple and Circle Apply to Become U.S. Banks, Which May Change the Competitive Landscape of Fintech

ChainCatcher news reports that, according to DL News, the two major stablecoin issuers in the cryptocurrency space, Ripple and Circle, have both applied for a national trust bank charter in the United States. If approved, this move will subject them to federal regulation and bring them closer to the core of the U.S. financial system. Obtaining the charter will place both companies under the supervision of the Office of the Comptroller of the Currency (OCC), requiring them to adhere to the same capital, liquidity, and risk standards as traditional banks.

Chris Colson, a payments expert at the Atlanta Federal Reserve Bank, stated that this is significant for cryptocurrency, primarily because it indicates that stablecoins are truly entering the financial mainstream. Furthermore, obtaining a banking charter means that these two companies can act as federally regulated custodians, holding stablecoin reserves and potentially accessing the Federal Reserve's real-time payment system. He emphasized that "the actions of Circle and Ripple blur the lines between fintech and traditional banking," posing significant competition to existing banks.