Market News

US Ripple Seeks National Trust Bank Status Amid Industry Pushback

A significant obstacle has emerged for Ripple in the US as it seeks to obtain national trust bank status.

The American Bankers Association (ABA), a powerful lobbying group, has criticized the approval process for cryptocurrency companies like Ripple and Circle.

In a letter to the Office of the Comptroller of the Currency (OCC), the ABA requested a moratorium on new trust bank licenses until the regulatory framework for digital assets is established.

This organization represents major banks such as JPMorgan Chase and Goldman Sachs, reinforcing the weight of its influence in this debate.

Recently, the OCC conditionally approved bank applications from Ripple and other cryptocurrency firms, signaling a potential shift in the banking landscape.

National trust banks offer services like asset custody and settlement without taking deposits or extending loans, which could align well with the needs of the crypto sector.

Ripple and Circle would gain legitimacy through federal oversight but avoid the risks associated with full consumer banking operations.

However, the ABA warns that hastily granting licenses without clear regulations could present significant risks to both regulators and consumers.

Citing previous failures in the crypto market, such as FTX and Celsius, the ABA emphasized the need for careful consideration of new business models.

As the discussion evolves, the outcome of this debate will be crucial for the future of cryptocurrency integration into the traditional banking system.