Analysis: Why Ripple and Circle's Moves to Become Banks Are So Important

According to DL News, two major stablecoin issuers in the cryptocurrency space, Ripple and Circle, have both applied for national trust bank charters in the United States. If approved, this move would subject them to federal regulation and bring them closer to the core of the U.S. financial system. Obtaining the charter would subject the two companies to supervision by the Office of the Comptroller of the Currency (OCC), requiring them to comply with the same capital, liquidity, and risk standards as traditional banks. Chris Colson, a payments expert at the Federal Reserve Bank of Atlanta, said this is important for Cryptocurrency, mainly because it indicates that stablecoins will truly enter the financial mainstream. In addition, obtaining a bank charter also 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 moves by Circle and Ripple blur the lines between fintech and traditional banking," posing significant competition to existing banks. [ChainCatcher]