Ripple and Circle Seek National Trust Bank Charters, Aiming to Revolutionize Cross-Border Payments
Revealed details about Ripple and Circle Bank's applications uncovered. Lightly restated.
In a significant move towards the future of digital finance, two major players in the cryptocurrency industry, Ripple and Circle, have applied for national trust bank charters from the Office of the Comptroller of the Currency (OCC).
While the detailed contents of both applications remain largely undisclosed due to confidentiality, publicly available information provides a glimpse into their ambitious plans.
Circle's Proposed Bank: First National Digital Currency Bank (FNDCB)
Circle's proposed institution, the First National Digital Currency Bank (FNDCB), aims to operate as a federally regulated trust bank under OCC oversight. If approved, FNDCB would manage the USDC Reserve on behalf of Circle’s U.S. issuer, supporting the issuance and circulation of USDC, currently the world’s largest regulated payment stablecoin.
The charter would permit FNDCB to offer digital asset custody services to institutional customers, strengthening USDC infrastructure and aligning with the proposed GENIUS Act, which aims to integrate digital assets into the U.S. financial system. The trust charter differs from a traditional bank charter, as it does not allow deposit-taking or lending but comes with more tailored regulation and lower capital requirements, focusing on trust and custody functions.
Leadership for FNDCB includes Heath Tarbert, former Commodity Futures Trading Commission Chair and Circle President, as board chair. Other board members include a former OCC Chief Counsel and a planned COO with Anchorage Digital experience.
Ripple's National Trust Bank Ambitions
Ripple's intentions for its Trust Bank include managing RLUSD reserves, providing related fiduciary services, and complementing their stablecoin and payments businesses. Jack McDonald, CEO of Standard Custody and Trust, will lead Ripple National Trust Bank. Ripple's Chief Legal Officer, Stuart Alderoty, is also a member of the Ripple National Trust Bank board.
However, the details of Ripple's business plan and operations remain largely confidential. The OCC filing for Ripple National Trust Bank appears to use outdated information, listing Keaney as current Vice Chair despite his 2014 departure.
Both companies marked about 90% of their submissions as confidential, limiting public insight into specific details. This move has raised questions about transparency, as the public has limited knowledge of the operational and financial specifics of these ambitious plans.
In summary, while detailed contents of both Circle’s and Ripple’s OCC applications remain largely undisclosed due to confidentiality, publicly available information shows Circle’s application focuses on establishing a national digital currency trust bank to manage USDC reserves and provide custody services under federal oversight, with high-level staffing disclosed, but most operational and financial specifics kept confidential. Ripple's plans, on the other hand, are shrouded in mystery, with only general purposes and organizational characteristics disclosed.
As these applications progress, it will be interesting to see how the OCC responds, and how these developments shape the future of digital finance and cross-border payments.
- The First National Digital Currency Bank (FNDCB), proposed by Circle, aims for federally regulated trust bank status under OCC oversight, with a focus on managing USDC reserves and providing digital asset custody services.
- Ripple's National Trust Bank ambitions include managing RLUSD reserves, offering related fiduciary services, and complementing their stablecoin and payments businesses.
- The charter for FNDCB is unique, as it allows tailored regulation and lower capital requirements, focusing on trust and custody functions, unlike traditional bank charters.
- OCC applications filed by both Circle and Ripple have kept most operational and financial details confidential, raising questions about transparency in the digital finance industry's future developments.
