Ripple’s pursuit of a US charter bank license has hit a significant hurdle after the Independent Community of Bankers of America (ICBA) filed a detailed opposition with the US Office of the Comptroller of the Currency (OCC). The seven-page letter warns that Ripple’s planned stablecoin operations through Ripple National Trust Bank (RNTB) could sidestep traditional banking regulations, raising compliance and consumer protection concerns.
Ripple Faces Opposition To Bank Charter Bid
According to reports from XRPBank on X social media, Ripple’s ambitions to secure a federally chartered trust bank for its proposed subsidiary, RNTB, have met sharp resistance from the ICBA. In a formal seven-page opposition letter addressed to Sebastian R. Astrada, Director for Licensing of the OCC, ICBA outlined a series of concerns over the potential risks posed by Ripple’s operations and banking goals.
The ICBA’s chief objection centers on Ripple’s proposed use of RNTB to manage reserves for its planned stablecoin, RLUSD, and to provide associated fiduciary services. While a national trust bank is legally barred from taking deposits, ICBA argues that RLUSD could mimic the function of deposits, potentially allowing Ripple to bypass established banking regulations.
The letter further accuses Ripple and XRP of having a history of non-compliance with anti-money laundering requirements and securities laws. Despite the crypto payments company gaining a legal win over the US SEC, the ICBA suggested in its letter that such a track record of regulatory uncertainties warrants heightened security.
The ICBA also warned that Ripple’s bid for a national charter bank license could blur the boundaries between traditional banking activities and the digital asset realm. According to the trade group, such a move could extend bank-like activities into the crypto sector without the oversight Congress intended when it created the national trust bank charter.
By urging the OCC to impose stricter regulatory scrutiny, ICBA signaled deep reservations about allowing a blockchain-driven payments company like Ripple to operate under a charter typically associated with conservative fiduciary management. The ICBA concluded its lengthy opposition by stating that approving RTNB’s charter could allow a non-traditional institution to provide deposit-like services without sufficient regulatory supervision, posing risks to consumer protection and the integrity of the banking sector.
Broader Regulatory And Industry Implications
Beyond Ripple’s specific case regarding its bid for a US charter bank license, ICBA’s stance reflects growing unease among traditional financial institutions toward the integration of stablecoins into mainstream banking frameworks. The opposition highlights an ongoing industry debate about whether stablecoin issuers like Ripple should be subject to the same safeguards as deposit-taking banks, especially when their products may function in a similar capacity.
ICBA’s arguments suggest that allowing RNTB to operate as proposed could set a precedent enabling other fintech and blockchain companies to circumvent conventional banking controls under the guise of trust bank operations. The dispute also underscores the regulatory tension between innovation and compliance in the digital asset sector. Supporting its opposition, the ICBA cited past enforcement actions made against Ripple, including the US Department of Justice and FinCEN case in which the crypto payments company paid a $700,000 penalty for failing to register as a money services business and maintain an adequate AML program.
Featured image from Getty Images, chart from Tradingview.com
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