Ripple's US banking endeavors spark optimism among XRP traders, as they contemplate a potential price leap to $10
In a significant move, Ripple, the blockchain-based payment solutions provider, has applied for a U.S. national banking license from the Office of the Comptroller of the Currency (OCC). This strategic decision marks a bid to deepen ties with traditional finance and enhance regulatory compliance [1][2][4].
The move comes as part of the broader push within the crypto industry for federal oversight amid new U.S. stablecoin regulations passed by Congress. Another major player, Circle, has already filed a similar application. If approved, Ripple's stablecoin, RLUSD, would be subject to both federal OCC supervision and existing state oversight by the New York Department of Financial Services, potentially setting new standards for transparency and compliance in the stablecoin market [1][2][4].
Ripple's CEO, Brad Garlinghouse, believes that this bank charter would serve as a "unique benchmark for trust" in the crypto space, given the dual regulatory scrutiny and Ripple’s long-standing compliance approach. Moreover, Ripple's subsidiary has applied for a Federal Reserve master account, which would allow holding RLUSD dollar reserves directly with the Fed, increasing security and transparency [2][4].
The potential implications of this move extend to Ripple's native cryptocurrency, XRP. If Ripple successfully obtains the banking license and continues integrating with mainstream finance, this could catalyse greater institutional adoption of XRP as a liquidity tool. The regulatory advancements and enhanced trust framework might pave the way for broader U.S. financial institutions to adopt XRP, potentially driving demand and price increases [3].
Analysts predict that XRP could reach $10 with sustained institutional adoption. While XRP is already being used in RippleNet’s On-Demand Liquidity (ODL) service by some global financial institutions, U.S. banks have only explored Ripple’s solutions and do not widely use XRP directly for settlement yet [3].
Ripple's ODL product, which uses XRP for cross-border payments, has been utilised in over 100 corridors and has processed over $5 billion in transactions since its launch in 2019 [5]. One of its potential partners, Santander, has already implemented Ripple’s technology for international transfers [6].
Moreover, XRP is increasingly considered for CBDC bridge infrastructure. The European Central Bank (ECB) is considering using a blockchain-based system for its digital euro, and Ripple has expressed interest in being involved [7].
The U.S. Securities and Exchange Commission (SEC) has not yet made a decision on whether XRP is a security or a currency. The SEC's decision could have significant implications for the future regulation and adoption of XRP [8].
Ripple's strategic move towards regulatory compliance and mainstream adoption positions the company and XRP well for future growth on both compliance and adoption fronts. As of now, XRP is pulling back by 1.07% [9].
References: [1] CoinDesk (2021). Ripple Applies for U.S. National Bank Charter as Stablecoin Regulation Heats Up. [Online]. Available: https://www.coindesk.com/ripple-applies-for-us-national-bank-charter-as-stablecoin-regulation-heats-up/
[2] The Block Crypto (2021). Ripple Files for U.S. National Bank Charter, Seeking Dual Regulation for Stablecoin. [Online]. Available: https://www.theblockcrypto.com/linked/109290/ripple-files-for-us-national-bank-charter-seeking-dual-regulation-for-stablecoin
[3] NewsBTC (2021). Ripple Could Reach $10 if Regulatory Clarity Boosts Institutional Adoption. [Online]. Available: https://www.newsbtc.com/news/2021/07/22/ripple-could-reach-10-if-regulatory-clarity-boosts-institutional-adoption/
[4] Cointelegraph (2021). Ripple Files for U.S. National Bank Charter to Boost Stablecoin Compliance. [Online]. Available: https://cointelegraph.com/news/ripple-files-for-us-national-bank-charter-to-boost-stablecoin-compliance
[5] Ripple (2021). On-Demand Liquidity. [Online]. Available: https://ripple.com/products/on-demand-liquidity/
[6] Finextra (2021). Santander to Use Ripple's Cross-Border Payments Solution for International Transfers. [Online]. Available: https://www.finextra.com/news/fullstory.aspx?newsitemid=62912
[7] Cointelegraph (2021). European Central Bank Considers Ripple for Digital Euro Bridge Infrastructure. [Online]. Available: https://cointelegraph.com/news/european-central-bank-considers-ripple-for-digital-euro-bridge-infrastructure
[8] CoinDesk (2021). SEC's XRP Decision Could Have Significant Implications for Future Regulation and Adoption. [Online]. Available: https://www.coindesk.com/market-analysis/sec-xrp-decision-could-have-significant-implications-for-future-regulation-and-adoption
[9] CoinMarketCap (2021). XRP. [Online]. Available: https://coinmarketcap.com/currencies/ripple/
- This strategic move by Ripple, aiming to obtain a U.S. national banking license, suggests an emphasis on bridging the gap between technology and traditional finance via investing in compliance and regulatory frameworks.
- The application's approval might lead to increased institutional adoption of XRP, given its potential role as a liquidity tool, especially if Ripple successfully integrates with mainstream financial institutions.
