Unveiled details about Ripple and Circle Bank's Applications
In a move that could shake up the banking industry, Ripple and Circle, two major players in the digital asset sector, have applied for national trust bank charters from the Office of the Comptroller of the Currency (OCC). The applications, which seek to open Federal Reserve accounts, have been marked as confidential, safeguarding proprietary business information and maintaining compliance with OCC confidentiality guidelines.
Ripple's subsidiary, Ripple National Trust Bank, will be led by Jack McDonald, CEO of Standard Custody and Trust. The bank's intentions include managing RLUSD reserves and providing related fiduciary services. Similarly, Circle's First National Digital Currency Bank (FNDCB) aims to manage USDC reserves and provide digital asset custody, strengthening USDC's infrastructure.
The extensive redactions in the OCC filings provide little substance for meaningful public comment during the Freedom of Information Act disclosure process. Key details about Ripple's plans for the Ripple National Trust Bank remain hidden, including its confidential business plan.
Both companies argue that their applications comply fully with OCC confidentiality policies and that the fiduciary activities they aim to perform fall under updated regulatory interpretations, justifying the privacy of detailed information. However, some traditional banking trade groups oppose the heavy redaction, claiming it limits meaningful public comment and regulatory transparency.
The prevailing regulatory practice supports substantial confidentiality in such applications to protect sensitive business information. Ripple's Chief Legal Officer, Stuart Alderoty, is a member of the Ripple National Trust Bank's board, along with Tim Keaney, former Vice Chair and CEO of BNY Mellon's Investment Services division. David Puth, former CEO of the Center Consortium that oversaw USDC governance, is also a member of the Ripple National Trust Bank's board.
Circle's application is led by Heath Tarbert, former Commodity Futures Trading Commission (CFTC) Chair and current Circle President, who will serve as board chair. The FNDCB board also includes a former Chief Counsel from the OCC and a planned Chief Operating Officer who previously held the same role at Anchorage Digital for nearly two years.
Notably, Anchorage was the first digital asset bank to receive a national trust charter. Puth previously led CLS, which settles $6.5 trillion in daily global foreign exchange transactions. Circle issues USDC, the second largest stablecoin with over $60 billion in market capitalization, while Ripple recently launched its RLUSD stablecoin.
As the digital asset sector continues to evolve, the potential establishment of these national trust banks could mark a significant step forward in the mainstream adoption of digital assets. The OCC requires a one-month public comment period for banking applications, but both companies have opted for a high degree of confidentiality to protect their competitive edge. The outcome of these applications will be closely watched by the industry and regulators alike.
[1] https://www.coindesk.com/ripple-circle-apply-for-national-trust-bank-charters-with-heavy-redaction [2] https://www.coindesk.com/ripple-files-for-national-trust-bank-charter-with-heavy-redaction [3] https://www.coindesk.com/ripple-seeks-national-trust-bank-charter-with-heavy-redaction [4] https://www.coindesk.com/ripple-says-its-national-trust-bank-charter-application-complies-with-occ-guidelines
- The Ripple National Trust Bank, with Jack McDonald as CEO, intends to manage RLUSD reserves and provide related fiduciary services in the banking sector, following Ripple's application for a national trust bank charter.
- The extended redactions in the OCC filings of Ripple's application for a national trust bank charter have been criticized by some traditional banking trade groups, who argue that it limits meaningful public comment and regulatory transparency.
- Circle's First National Digital Currency Bank (FNDCB) aims to manage USDC reserves and provide digital asset custody, as the company's President, Heath Tarbert (former CFTC Chair), leads the application process for a national trust bank charter.
- In the technology-driven digital asset sector, the potential establishment of trust banks like Ripple National Trust Bank and Circle’s FNDCB, such as Anchorage Digital, could signify a significant leap towards mainstream adoption, as they await the outcome of their application processes and subsequent regulatory scrutiny.
