Crypto Giants Eye US Bank Charters Amid Regulatory Clarity
Traditional financial institutions scramble for banking licenses grants - John Deaton expresses surprise over Ripple's absence.
Yo, hear this! Major players in the crypto world are shaking things up, aiming to get cozy with the traditional banking system. Sources close to the matter tell us that Circle, BitGo, Coinbase, Paxos, and others are seriously considering banking charters to operate under more regimented legal structures.
All this comes as U.S. regulators are stepping up their game, trying to define clear-cut guidelines for stablecoins following a history of industry setbacks. Even Fed Chair Jerome Powell admitted the allure of digital assets, declaring that constructing a stablecoin framework isn't just fashionable but necessary.
Ripple's Missing Act
With all the buzz surrounding crypto firms chasing banking charters, legal eagle and Ripple [XRP] advocate John Deaton raised eyebrows. Given Ripple's relentless pursuit in reshaping cross-border finance and its robust ties with the traditional financial sector, Deaton found it odd that the company wasn't on the list. He pointed this out on Twitter, saying:
A banking charter would allow crypto firms to mimic traditional financial institutions, offering a wider service spectrum under regulatory supervision.
Ripple's Other Moves
Deaton's confusion probably stems from Ripple's constant attempts to carve out a significant role in finance, especially through its powerful payment infrastructure. Let's not forget Ripple's recent $1.25 billion acquisition of Hidden Road, a prime brokerage firm. This move demonstrates Ripple's aim to enhance its service offerings and fortify its presence in institutional markets. Strangely, though, Ripple hasn't shown much interest in a banking license, possibly waiting for its legal spat with the SEC to reach a resolution.
Recent court decisions have granted a joint motion to pause the XRP case, hinting at an imminent settlement. If that happens, a bank license might just be on Ripple's to-do list.
XRP's current status
At the moment, XRP was trading at $2.09, dipping 1.10% due to general market fluctuations. Still, optimism remains, with the global crypto market cap skyrocketing to $2.76 trillion, registering a 0.58% growth in the last 24 hours, reflecting newfound confidence in the digital asset arena.
- Major crypto firms like Circle, BitGo, Coinbase, Paxos, and possibly Ripple are pondering over the acquisition of banking charters, aiming to blend into the traditional banking system.
- U.S. regulators are actively striving to establish precise guidelines for stablecoins, driven by past industry challenges and the allure of digital assets.
- John Deaton, a legal expert and Ripple advocate, expressed surprise that Ripple, with its vast ambitions in transforming cross-border finance and connections to the traditional financial sector, didn't seem to be pursuing a banking charter.
- Obtaining a banking charter would enable crypto firms to emulate traditional financial institutions, expanding their service spectrum under regulatory oversight.
- Ripple's recent acquisition of Hidden Road, a prime brokerage firm, underscores its desire to strengthen its institutional market presence and augment its service offerings.
- Though Ripple hasn't shown interest in a banking license, recent court decisions have given cause for hope, suggesting a potential Ripple-banking charter association soon, following the settlement of its legal spat with the SEC.
