Top Banks Lobby Against Ripple, Circle Trust Approval — Fear of XRP Disruption?

U.S. banking groups are urging regulators to slow down the approval of national banking charters for crypto firms.
They argue that companies like Ripple and Circle don’t currently meet the fiduciary standards and shouldn’t yet be granted such privileges.

A coalition of major U.S. banking trade associations, including the Consumer Bankers Association, Independent Community Bankers of America, American Bankers Association, America’s Credit Unions, and National Bankers Association, sent a joint letter to the Office of the Comptroller of the Currency (OCC), asking it to halt new banking license applications from several crypto-related firms temporarily.

The letter specifically urges regulators to hit pause on national trust bank applications from several crypto-focused firms, including Ripple National Trust Bank, National Digital Trust Co, Fidelity Digital Assets, and First National Digital Currency Bank.

This move comes shortly after Ripple Labs submitted its own application for a national banking license just last week. The goal is to oversee its RLUSD stablecoin operations and to gain direct access to the Federal Reserve’s payment system. Circle, the issuer of USDC, the second-largest stablecoin just after USDT, also filed a similar application on June 30, as reported by Crypto News Flash.

While such a charter would give them nationwide reach and greater credibility, traditional banks worry it could disrupt the banking landscape, increase money laundering risks, and offer crypto firms unfair regulatory advantages.

Trust Banks vs Crypto Firms

The banking trade associations argue that national trust banks have historically focused on true fiduciary services, like managing estates and trusts, but many crypto firms, such as those seeking new federal charters, primarily offer digital asset custody and stablecoin reserve management, which don’t qualify as fiduciary work under federal law. They warn that approving such charters would exploit a legal loophole and fundamentally shift the meaning of a trust bank.

The groups referenced the now-rescinded Interpretive Letter 1179, which allowed the OCC to define fiduciary services on a case-by-case basis, following Letter 1176, which opened the door for crypto custody through trust charters without public input.

The associations also criticized the current application process as lacking transparency, saying public filings were too vague and comment windows too short to allow meaningful oversight. They then stated, “Accordingly, the Associations respectfully request that the OCC release to the public a more complete description of the Applicants’ business plans, with appropriate redactions only with respect to truly confidential information, and an extension of the comment periods that provide ample time to scrutinize such information.”

They’re concerned that granting these charters could set a dangerous precedent, allowing dozens of non-fiduciary crypto firms to enter the regulated banking system with limited oversight, potentially undermining decades of financial regulation and risking systemic stability.

Implications for XRP

Just when the XRP community thought the long-running legal battle with the SEC was finally behind them, a new development has emerged. Ripple’s bid for a national bank charter is stirring up fresh attention, though this time, it’s not all bad news.

The move has already injected bullish momentum into XRP, with the token’s price climbing 21% over the past week and 2.85% in the last 24 hours, now trading at $3.61. Trading volume is also up 39%, reaching $9.35 billion. The potential approval of a national charter and that of an XRP ETF would definitely push XRP higher to $5.

This would be the first step toward crypto-native firms gaining permanent access to federal banking privileges. On the other hand, if the charter is denied or delayed, it would be seen as a win for traditional banks, possibly slowing crypto’s integration into mainstream finance.