The OCC granted Ripple conditional approval to establish a trust bank

Source: CritpoTendencia Original Title: The OCC granted Ripple conditional approval to establish a trust bank Original Link: This Friday, the Office of the Comptroller of the Currency (OCC) granted conditional approval to several cryptocurrency companies’ applications for trust banks. This is a significant step towards integrating the crypto world with traditional finance. Among the approvals by the OCC are those granted to Ripple, BitGo, and Fidelity.

The other two approvals were for Paxos and First National Digital Currency Bank, according to the OCC’s official publication. This concession by the Comptroller allows these companies to join the U.S. federal banking system while awaiting compliance with regulatory conditions.

It is important to note that this step increases the number of national trust banks in the U.S. Currently, there are 60 entities on the list. With the inclusion of the mentioned firms, the spectrum broadens to incorporate the cryptocurrency system into the sector.

This way, native companies in the crypto sector are allowed to operate across state borders under constant federal supervision. Ripple CEO Brad Garlinghouse celebrated this conditional approval granted by the OCC to the issuer of the XRP token.

In a post on X, the executive described the event as “a huge step forward.” He then addressed critics of cryptocurrencies, such as the banking lobby, accusing them of engaging in anti-competitive practices. He emphasized that critics no longer have valid arguments to claim that cryptocurrencies operate under different rules.

What does the OCC approval mean for Ripple?

This permission allows Ripple to offer trust bank services, including custody and management of client assets. These include a wide range of assets such as cryptocurrencies and tokenized assets.

Additionally, the permit grants the company the ability to self-custody assets like stablecoins, potentially using U.S. Treasury bonds stored through a Federal Reserve master account. However, this involves another complex process beyond the OCC’s scope.

Moreover, the bank can also offer institutional custody, blockchain-based payments, and cross-border remittance management. All of this under the centralized supervision of the Office of the Comptroller of the Currency, or OCC.

On the other hand, this approval also has some limitations for Ripple and other companies that received it. For example, the emerging banks from these initiatives are restricted from traditional deposit-taking and lending activities. Instead, these banks must focus mainly on trust and custody functions without full commercial banking powers.

A positive aspect of the OCC trust letter for Ripple is that it paves the way for a direct relationship with the Federal Reserve. As mentioned earlier, this mainly involves the master account for self-custody of assets backed by bonds.

Potential impact of this permission on XRP’s price

As expected, what is good for Ripple is also good for its token XRP. The OCC trust letter could increase the token’s utility, leading to higher demand and consequently, a rise in its price.

At the time of writing, XRP’s price exceeds $2.05 per coin. Its performance over 24 hours and 7 days is roughly flat. The reality of this coin is shaped by the challenging conditions faced by the broader cryptocurrency market.

Despite this, the OCC trust letter to Ripple should not be seen as a short-term catalyst. Its effects are likely to be long-term as the potential of this bank develops and gains traction among clients. Essentially, XRP continues to build momentum in anticipation of a steady rally projected into the future.

It is worth emphasizing that a trust bank is not the only factor that could boost demand for XRP. Simultaneously, ETFs in the stock market also represent a constant source of institutional capital inflows into the token.