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Ripple’s U.S. Bank Charter Bid Sparks Hopes of Institutional Breakthrough for XRP

Ripple’s U.S. Bank Charter Bid Sparks Hopes of Institutional Breakthrough for XRP

Ripple’s recent application for a U.S. national bank charter is making waves across the cryptocurrency industry, with experts suggesting it could fundamentally reshape the role of XRP in global finance.

The move, revealed by industry analyst All Things XRP (@XRP_investing), signals Ripple’s ambition to integrate deeper into the traditional banking system and redefine stablecoin standards.

Ripple Moves Toward Federal Oversight

In an announcement that quickly captured the attention of the crypto community, Ripple disclosed that it had applied for a national bank charter with the Office of the Comptroller of the Currency (OCC).

If approved, Ripple would join the ranks of federally regulated banks, a major leap from its current position as a blockchain payments firm.

Such a charter would also place Ripple under rigorous oversight from both the OCC and the New York Department of Financial Services (NYDFS), complementing its existing BitLicense. Experts believe this regulatory alignment could lend immediate credibility to Ripple and its products, making them more attractive to risk-conscious financial institutions.

Federal Reserve Master Account Could Revolutionize RLUSD

Ripple’s ambitions don’t stop at a banking license. The company has also applied for a master account at the Federal Reserve through its subsidiary, Standard Custody.

This would give Ripple direct access to the Fed’s payment rails, enabling it to hold reserves for RLUSD, its recently launched stablecoin, at the central bank itself.

According to a report from The Block, having a Fed master account could grant RLUSD a security and transparency edge over competitors like USDC and USDT, which currently rely on third-party banking partners.

RLUSD is already backed 1:1 by U.S. Treasuries and could soon gain FDIC insurance, potentially making it the safest institutional-grade stablecoin in the market.

XRP’s Institutional Utility Could Soar

Industry observers, including All Things XRP, argue that Ripple’s potential transformation into a federally regulated bank could dramatically increase institutional confidence in XRP.

As the native asset for Ripple’s On-Demand Liquidity (ODL) solution, XRP would benefit from a surge in legitimacy, potentially becoming the go-to vehicle for banks seeking efficient, compliant cross-border settlement.

A banking license would also allow Ripple to bypass traditional correspondent banking networks, offering faster and cheaper alternatives built on the XRP Ledger.

Analysts from Messari note that with a growing preference among institutions for blockchain-native financial rails, Ripple’s timing could be ideal for capitalizing on shifting market dynamics.

Stablecoin Market Gap Could Narrow

Despite RLUSD’s modest market cap of around $470 million, dwarfed by USDC’s $62 billion and USDT’s $158 billion, Ripple’s plan to operate as a licensed bank with Fed connectivity could help RLUSD rapidly close the gap.

Institutional players hesitant about stablecoins due to counterparty risk may find RLUSD’s model far more attractive, especially with direct regulatory supervision.

If Ripple secures these approvals, it could become the first blockchain-native financial institution offering end-to-end services like real-time settlement, custody, and liquidity management, all built on the XRP Ledger.

This could set a new standard for integrating crypto technology with traditional finance, according to research by Galaxy Digital.

Potential Turning Point for Ripple and XRP

The analysis concludes that Ripple’s pursuit of a U.S. banking license and Fed master account represents more than a regulatory milestone; it could mark a turning point for XRP’s institutional adoption.

By bridging regulatory compliance with blockchain innovation, Ripple may finally unlock the scale and credibility it has long sought, fundamentally reshaping both the stablecoin and cross-border payments markets.