Ripple’s Bank Charter Faces Block from 42 Big Banks, Including Morgan Stanley & Bank of America

 Ripple is facing strong resistance in its effort to become a federally licensed bank in the U.S. 

In July, the company applied to the Office of the Comptroller of the Currency (OCC) to establish a national trust bank, a move that could mark a major step in integrating crypto with the traditional financial system.

If approved, this would allow Ripple to offer services like stablecoin issuance through RLUSD, digital asset custody, and even direct access to the U.S. payment system via a Federal Reserve master account.

Why Are the Banking Giants Pushing Back? 

Ripple’s plans have sparked strong resistance from some of the biggest names in banking. 

The Bank Policy Institute (BPI), which represents 42 major U.S. banks, has voiced opposition. Members include JPMorgan, Citigroup, Bank of America, Goldman Sachs, Morgan Stanley, BNY Mellon, and others.

The major concerns it cited were unclear crypto regulations and the limited time given for public input. It argues that the public was given just 2.5 weeks to review the application, and said it was inadequate for assessing the proposal.

This clash highlights the growing divide as traditional institutions are concerned about blockchain startups entering their regulated space. Ripple positions itself as a link between crypto and traditional finance, using its XRP token to handle cross-border payments for 300+ partners.

Transparency and Risk in the Spotlight

This is not the first time banking groups have raised red flags.

Previously, banking groups, including the American Banking Association, had urged the OCC to delay its decision on granting national bank charters to crypto firms like Ripple, Circle, and Fidelity Assets. In a joint letter, the groups argue that the applications from the crypto companies lacked transparency and did not clearly show how these firms meet trust bank standards.

They also cited concerns over limited public review, which they say could undermine trust and introduce risks to the financial system.

Momentum Builds for Crypto Banking Charters

However, interest in crypto banking charters is growing. With new legislation like the GENIUS Act laying out clearer rules for stablecoins, more crypto firms are expected to apply. Experts say that these federal charters could help crypto companies operate nationwide without needing separate state licenses.

Besides, the recent White House report is also pushing for clear rules to help digital asset firms obtain bank charters, access Fed master accounts, and offer services like custody, tokenization, and stablecoin issuance without being held back by vague or outdated regulations. 

Even with opposition from major banks, Ripple is pushing boundaries to innovate in digital payments and stablecoins, which is further backed by growing regulatory clarity.