• The U.S. Trust bank status will allow the crypto firms to integrate crypto with America’s banking system.
• Digital asset companies pursue Federal Reserve Master accounts to cut transaction costs and boost credibility.

Ripple, Circle, & BitGo have each applied for federal trust bank charters in the U.S., according to a report by the Wall Street Journal. The strategic initiative aims at integrating cryptocurrency with America’s banking system, a move expected to safeguard digital assets and the payment process under government supervision. 

Ripple has submitted a de novo application establishing its trust bank for the RLUSD ($1.00) stablecoin. The firm also requested a Federal Reserve master account to gain direct access to core payment and settlement infrastructure.

Brad Garlinghouse, Ripple Chief Executive Officer, shared on his X account, “True to our long-standing compliance roots, Ripple is applying for a national bank charter from the OCC. If the license is approved, it would be a new benchmark for trust in the stablecoin market, as Ripple would be under state and federal oversight.

Circle, following its recent blockbuster IPO, filed for a national trust bank license to directly oversee USDC ($1.00) reserves and offer institutional custody under OCC oversight. BitGo is pursuing the conversion of its state-chartered trusts into a federally supervised bank.

Upon approval, these charters are expected to boost transparency and institutional trust, marking a notable milestone for crypto firms entering mainstream finance.

See Related: Crypto Giants Coinbase, Circle, BitGo Eyeing U.S. Bank Charters

Why Crypto Firms Are Chasing Federal Reserve Master Accounts

According to Garlinghouse, the Federal Reserve master account will help crypto companies directly tap into the central bank’s main payment rails, bypassing intermediary banks. These accounts help lower transaction fees for the crypto firms and investors.

Moreover, the accounts enable digital assets companies to hold RLUSD reserves directly at the Fed. Gaining access to the Federal Reserve’s master accounts enhances credibility and trust among regulators and institutional partners. 

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