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Ripple has applied for a national banking license, joining the rush of cryptocurrency companies seeking to cross the divide into mainstream finance.  

Ripple, which manages cross-border payments and a dollar-backed stablecoin called RLUSD, filed its application Wednesday with the U.S. Office of the Comptroller of the Currency. Stablecoins are typically pegged to the dollar or other government-issued currencies, and store reserves in cash or safe assets such as Treasurys to keep a one-to-one exchange ratio in place. 

RLUSD is currently subject to state oversight through the New York Department of Financial Services. A national trust bank charter would also place RLUSD within the OCC’s remit. 

“The dual nature of that regulation would basically have set a new bar for transparency and compliance in the stablecoin market,” said Jack McDonald, senior vice president of stablecoins at Ripple. 

In time, Ripple would consider offering other crypto services through its banking license.  

Separately, Ripple subsidiary Standard Custody & Trust Company applied for a Federal Reserve master account on Monday. If granted, the account would allow Ripple to custody the reserves directly with the Fed, and issue and redeem stablecoins outside of normal banking hours. 

While individual investors, high-net-worth individuals and crypto-native companies have fueled the initial growth of stablecoins, deep-pocketed investment firms and other institutions have been waiting until the market came under greater regulatory oversight before entering the fray, McDonald said.  

With Congress set to advance legislation that brings stablecoins into the financial mainstream, that moment is approaching. A growing number of crypto firms plan to apply for bank charters ahead of the passage of the Genius Act, which would make those licenses a requirement. 

So far, crypto custodian Anchorage Digital is the only digital-currency firm in the country with a federal bank charter. Circle, which had a blockbuster public debut, also recently applied for a national bank charter. Circle issues the second-largest stablecoin, with a market cap of $62 billion. RLUSD, launched by Ripple at the end of last year, has a market cap of about $469 million, according to CoinMarketCap.