ICBA opposes Ripple’s application for a national trust bank charter

ICBA expressed opposition to blockchain tech company Ripple’s application for a national trust bank charter for its proposed subsidiary, Ripple National Trust Bank.

Details: In a letter to the OCC, ICBA said:

• Granting the charter would undermine the stability of the financial system by allowing a non-traditional institution to offer deposit-like services without adequate regulatory oversight.

• Ripple’s stated goals of using stablecoins to “build the next evolution of global financial services and redefine the way money moves in the digital economy” are outside of the scope of the powers Congress envisioned when it created the national trust bank charter.

• The OCC must undertake formal rulemaking to clarify the scope of national trust bank powers and ensure alignment with congressional intent.

Recent Circle Application: ICBA last week urged the OCC to deny the charter application of peer-to-peer payments company Circle to prevent the risks posed by stablecoins, including potential deposit drainage, increased fraud, and circumvention of critical banking regulations.

Growing Nonbank Trust Applications: ICBA and other groups previously told the OCC that recent national bank charter applications submitted by National Digital TR CO; Fidelity Digital Assets, N.A.; First National Digital Currency Bank, N.A.; and Ripple National TR Bank raise substantial concerns. It urged the OCC to postpone considering the applications.

What It Means for Community Banks: In a recent letter urging the OCC to keep in mind several key principles when considering digital asset charter applications, including their unique risks, ICBA noted these applications pose unique challenges to bank chartering policy and to the safety and soundness of the financial system.