Ripple Follows Circle’s Lead and Applies for US Banking License

Ripple also applied for a Master Account with the Federal Reserve. These applications aim to bring Ripple’s RLUSD stablecoin under dual state and federal oversight to align with new legislation like the GENIUS Act. This follows a similar move by Circle, the issuer of USDC, which also applied for OCC approval. Meanwhile, billionaire Peter Thiel is backing a new startup- and crypto-focused bank called Erebor, which will fill the gap left by Silicon Valley Bank’s collapse. In Europe, Belgium’s KBC Bank is set to offer crypto investments via its Bolero platform. Ripple Makes Power Play in US Banking Ripple Labs is seeking a US banking license to deepen its ties with traditional finance and comply with emerging stablecoin regulations. The company’s CEO, Brad Garlinghouse, announced on X that Ripple formally applied for a national bank charter from the Office of the Comptroller of the Currency (OCC). If approved, it would bring Ripple under both federal and state regulatory oversight. The New York Department of Financial Services already supervises Ripple’s RLUSD stablecoin, and Garlinghouse said that this added federal oversight will set a new standard of trust in the stablecoin industry. This development happened after a similar application by Circle Internet Group, the issuer of the USDC stablecoin. Just days earlier, Circle applied to the OCC to form a national trust bank responsible for managing its stablecoin reserves. Both moves come on the heels of the US Senate passing the GENIUS Act, which is legislation that outlines regulatory requirements for stablecoin issuers and designates the OCC as the key federal watchdog for larger players in the space. Circle’s CEO Jeremy Allaire said that the company is aligning itself with the changing regulatory landscape around dollar-pegged payment stablecoins. In addition to its OCC application, Ripple also applied for a Master Account with the Federal Reserve. This would allow Ripple to hold RLUSD reserves directly with the Fed. Garlinghouse described this feature as a critical safeguard to reinforce long-term trust in the stablecoin. The application was made via Standard Custody, a crypto custody firm that Ripple acquired in early 2024. Garlinghouse explained that the tide is turning in Washington, with Congress advancing clearer crypto regulations and traditional banks showing renewed interest in engaging with digital asset firms. This is in stark contrast to the restrictive environment of previous years, which was often referred to as “Operation Chokepoint 2.0.” XRP’s price action over the past 24 hours (Source: CoinMarketCap ) Market reaction to Ripple’s banking ambitions has been positive. XRP climbed 2.87% to $2.24. The rally began shortly after Garlinghouse’s announcement and peaked at $2.27 before slightly retreating. Peter Thiel Backs New Bank for Startups and Crypto Meanwhile, a group of billionaires, including PayPal co-founder Peter Thiel, is reportedly working on launching a new financial institution named Erebor to fill the void left by the collapse of Silicon Valley Bank in March of 2023. According to the Financial Times , Erebor will focus on serving startups and cryptocurrency companies, and has already applied for a US bank charter to operate as a fully licensed bank . Thiel’s venture capital firm, Founders Fund, is said to be among the early investors in the new bank. Other backers reportedly include Palmer Luckey, co-founder of defense contractor Anduril, and Joe Lonsdale, founder of investment firm 8VC. Thiel is a long-time supporter of Bitcoin and the broader digital asset ecosystem, and he is also known for backing Bullish, a crypto exchange that recently filed for an initial public offering in the United States. Erebor’s strategy seems to be centered on providing banking services and loans to early-stage startups and other high-risk ventures that have found it difficult to access capital in the wake of tighter financial regulations. The initiative is also seen as an attempt to reestablish a specialized financial services institution that mirrors the role Silicon Valley Bank once played in the innovation economy. The collapse of Silicon Valley Bank in 2023 sent shockwaves through the banking and crypto industries. It was shut down by California’s financial regulator after rapidly rising interest rates devalued its bond holdings. The bank failed when a flood of clients tried to withdraw funds, triggering a liquidity crisis. At the time, the bank served around half of all venture capital-backed tech and life sciences firms in the country. Bank failures in the year 2023 (Source: FDIC ) The demise of Silicon Valley Bank also contributed to a wider crisis that saw the downfall of other institutions like Silvergate Bank, Signature Bank, and First Republic Bank. The crypto sector was particularly hard-hit, with investment funds losing roughly 10% of their assets under management in a single week. According to Harvard Business Review, the bank’s failure tightened credit access for venture-backed startups, which created an urgent need for a replacement institution. Although Silicon Valley Bank still operates as a division of First Citizens Bank after its acquisition in March of 2023, its collapse shed some light on the vulnerabilities in the venture capital and digital asset banking landscape. Erebor now plans to fill that gap. KBC Bank to Offer Crypto Investments KBC Bank, one of Belgium’s largest financial institutions, is preparing to allow its customers to invest in cryptocurrencies through its online investment platform Bolero. The bank confirmed that Bolero will provide access to Bitcoin and Ethereum investments later this year. A spokesperson for KBC stated that the bank is currently undergoing an analysis to become recognized as a Crypto-Asset Service Provider (CASP), with the aim of launching the service by autumn. The initiative is expected to give private investors the opportunity to invest directly in Bitcoin and Ethereum in a secure and regulated environment, with an emphasis on education and compliance. If the rollout proceeds as planned, KBC will become the first major Belgian bank to offer crypto investment services to retail clients. Currently, most Belgian investors rely on international exchanges like Binance, Coinbase, and OKX, or on fintech platforms like Revolut and N26 to access crypto markets. KBC’s move forms part of the trend among European banks that are increasingly exploring crypto investment and custody solutions. In Germany, both Deutsche Bank and Sparkassen-Finanzgruppe are reportedly preparing to introduce crypto offerings in the near future. Meanwhile, Spain’s BBVA has been advising its high-net-worth clients to allocate a portion of their portfolios to cryptocurrencies like Bitcoin. This wave of crypto adoption by banks was anticipated by industry leaders. In April, executives from major crypto firms Messari and Sygnum predicted that banks would start entering the space more aggressively in the second half of 2025, encouraged by a more favorable global regulatory landscape. Supporting this trend, Stripe’s co-founder John Collison revealed in May that the payments giant has been in discussions with several banks interested in experimenting with stablecoins.

Source: Coinpaper