OCC gives final approval to Ripple's national trust charter

Key insight: The Office of the Comptroller of the Currency's final approval — one of more than two dozen conditional or final approvals during the second Trump administration — give the crypto giant access to a national regulatory standard to conduct nonfiduciary custody of stablecoins. 

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Supporting data: The company says its RLUSD token has expanded to a $2.5 billion market capitalization. 

The Office of the Comptroller of the Currency gave Ripple's trust charter application final approval on Monday, less than a year after the firm received a conditional approval from the agency.

The company's CEO Brad Garlinghouse celebrated the move, saying it would further the integration of crypto technology into the regulated banking sector. 

"For years, we've said crypto and banks work better together. Final approval for Ripple National Trust Bank is what that looks like in practice," Garlinghouse said in a press release. "A national trust charter gives us an even stronger foundation for RLUSD and the institutional products we're building across payments, custody and capital markets."

The move comes as a number of digital asset firms — including Circle, Paxos, Coinbase and others — have sought national trust charters to conduct stablecoin activities on a national level, bypassing much of the patchwork of regulations imposed by individual states. It also comes on the heels of the OCC's finalization of a stablecoin regulatory framework that opens the door to companies providing returns on assets held in custody. 

Ripple says the approval will allow it to scale the firm's stablecoin, known as RLUSD, across institutional use cases. The token, which the company says has grown to a $2.5 billion market cap, is used across the firm's payment rails and serves as collateral for its institutional investor brokerage platform.

"Final approval of [Ripple National Trust Bank] builds on that momentum at a pivotal moment for digital assets in the United States," the firm continued in its release. "As stablecoins and blockchain-based financial infrastructure move further into mainstream payments and capital markets, Ripple believes clear rules and rigorous supervision are critical to earning institutional trust and ensuring responsible innovation can scale in the U.S."

Comptroller of the Currency Jonathan Gould has been granting a number of special-purpose banking charter applications to crypto firms, a notable turnabout after the morte skeptical stance adopted by banking regulators toward crypto during the Biden administration. The OCC has approved or conditionally approved north of 20 national trust bank charters during the second Trump administration, including over a dozen crypto firms. 

Unlike full-service banks, national trust banks are not federally insured by the Federal Deposit Insurance Corp., and the regulatory requirements that apply to them can differ significantly from those traditional banks typically face.

The wave of charter approvals has sparked a legal fight, culminating in a banking industry-led lawsuit against the OCC challenging the agency's interpretation of the national trust charter. The outcome of that lawsuit could have ramifications for the nearly two dozen new special-purpose banks that have received the green light. 

One critical issue in the case is whether trust companies may conduct the kinds of activities proposed by many of the applicants — notably standalone nonfiduciary custody — without triggering banking regulations that apply to traditional banking firms. Congress revised the National Bank Act in 1978 to allow national banks to focus narrowly on trust-related activities "and activities related thereto." 

Gould — then serving as OCC general counsel — interpreted "activities related thereto" to include certain cryptocurrency custody and related services defined by the agency as part of Interpretive Letter 1176 in 2021. That letter stated that national trust companies could provide. Gould has said the letter clarified, rather than changed, the charter's scope and intent.

The letter served as the basis for a number of conditional approvals for trust charter applicants. Courts in this case will have to independently determine whether the OCC's interpretation of the national trust charter passes muster. In the wake of the Supreme Court's 2024 decision overturning Chevron deference, that means they will no longer defer to agency expertise.