Insightful Editorial: Crypto Custody and Ripple’s Banking Ambitions
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Ripple’s Banking License Pursuit Amid New Crypto Custody Guidelines
As Ripple seeks to obtain a national banking license, new directives from U.S. banking regulators could soon impact the crypto company. Known crypto analyst, Pumpius, has outlined the potential implications for XRP and other digital assets.
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Upcoming Crypto Custody Regulations: What It Means for Ripple
The Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) have issued a joint statement asserting that current laws, regulations, and risk management principles extend to crypto custody. With Ripple’s banking license application under consideration, these guidelines are crucial for the firm’s future operations.
The statement clarifies that banks can offer safekeeping services for cryptocurrencies, either in a fiduciary or nonfiduciary role. Ripple, which manages RLUSD and XRP to streamline its payment processes, may handle client funds as part of its operations. The regulators’ recognition of cryptocurrencies signifies a notable advancement for the industry, especially following the challenges posed by the Operation Chokepoint during the Biden administration, which led to the debanking of numerous crypto companies. With a banking license, firms like Ripple could directly manage their digital assets.
The OCC is anticipated to reach a decision on Ripple’s application within 120 days. In light of the Trump administration’s supportive stance on crypto, a sooner resolution is possible. Meanwhile, guidance from financial authorities bolsters the legitimacy of Ripple’s decision to entrust its RLUSD reserves to BNY Mellon.
Significance of the Custody Rule for XRP
Crypto analyst Pumpius emphasized the importance of the new regulatory guidance for XRP, given its connection with Ripple and its potential future role in the financial sector. He pointed out that U.S. banks can now directly hold the altcoin for various clients, ranging from individual investors to large institutions.
Pumpius further elaborated that this development is pivotal as Ripple’s private ledger, BNY Mellon custody, and RLUSD integration are aligned for a future where XRP dominates financial transaction infrastructures. He described the XRP Ledger as “battle-tested and ready for institutional use,” asserting that this marks the institutionalization of XRP as the “ultimate reserve rail.”
At the time of writing, XRP’s market value stands at approximately $3.08, experiencing an uptick of over 5% within the past 24 hours, according to CoinMarketCap data.
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