First glimpses of Volume 1 of Ripple's OCC banking license application emerge

Ripple has tuned up its mission to expand its financial infrastructure, taking a formal step by releasing Volume 1 of its Interagency Charter Application that it submitted to the Office of the Comptroller of the Currency (OCC). 

The analysis of the document outlines the proposal to establish the Ripple National Trust Bank. The bank is expected to be a limited national trust bank that would operate as a subsidiary of Ripple Labs, with its headquarters in New York. While Ripple has garnered its popularity through its native digital asset XRP, the application will focus more on the use of its native stablecoin RLUSD.

Brad Garlinghouse, the CEO of Ripple, publicly confirmed the company’s application for a national trust bank charter with the OCC on July 2. In his statement, he said the company’s goal is to create a structure that brings its RLUSD stablecoin under both federal and state oversight. According to Garlinghouse, the move is expected to establish a “new and unique benchmark for trust in the stablecoin market.”

Ripple releases Volume 1 of its OCC application

According to the filing, Ripple is not applying for a traditional banking license, which will involve taking deposits or lending activities. Instead, the bank is expected to handle fiduciary activities, allowing it to provide custody and infrastructure services in line with the oversight of the OCC. In addition, the trust bank is not expected to fall under the Community Reinvestment Act, which only applies to institutions that engage in deposits or lending.

The application notes that “as a national trust bank, the Trust Bank will not be subject to the CRA.” This positions the bank within a business-to-business (B2B) framework, focusing on custody, tokenization infrastructure, and stablecoin management rather than retail banking. The application also expressly did not mention XRP, with crypto commentators noting that it might be a deliberate act to separate both entities.

By removing XRP, the move will ensure that any entanglement is avoided, considering XRP has been a subject of legal scrutiny in the past. However, this doesn’t rule out an XRP integration in the future, but it remains to be seen what may happen. Meanwhile, another dimension to the filing shares a relationship to the internal structure of Ripple and compensation plans.

This applies to a confidential stock benefit plan included in an unpublished exhibit, revealing that the company intends to issue private stock to executives and insiders. While this practice is not unusual, commentators mentioned that the confidentiality shows a broader corporate strategy, potentially in anticipation of increased scrutiny or even a future Initial Public Offering (IPO).

Five-man governance panel shows commitment to oversight

The Trust Bank’s operational and governance structure also shows that Ripple is committed to experienced oversight. The list comprises organizers like John McDonald, an experienced financial executive and President of Standard Custody & Trust Company, and John Zavaglia, Ripple’s Treasurer with extensive experience in corporate finance and treasury operations.

The list also includes Stuart Alderoty, Ripple’s Chief Legal Officer. Alderoty boasts over 35 years of experience in regulatory and legal leadership across various financial institutions. Timothy Keaney, a former Vice Chairman of BNY Mellon, and David Puth, former CEO of CLS Group and Centre Consortium, are also on the list. 

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