On June 30, stablecoin issuer Circle submitted an application for a national trust bank license to the Office of the Comptroller of the Currency (OCC) in the United States and plans to establish a national trust bank in the U.S.; on July 2, Ripple followed suit by submitting a national bank license application, having previously applied for a Federal Reserve master account through its subsidiary Standard Custody, intending to directly manage the RLUSD reserves. In just four days, the two major stablecoin giants launched a key compliance sprint within the U.S. financial regulatory system.

As one of the important financial strategies during Trump’s term, the payment of stablecoins coincides with the potential demand for U.S. Treasury bonds under the dollar system. In the current rapid implementation of the stablecoin industry, why does the stablecoin industry favor U.S. licenses?

GENIUS Act Catalyst: Federal License Becomes a Matter of Life and Death

The core driving force behind this licensing battle is the “GENIUS Act” (Guiding and Establishing National Innovation for US Stablecoins Act), which was passed by the U.S. Senate in mid-June. This act systematically stipulates for the first time that stablecoin issuers must become “licensed payment stablecoin issuers” and must meet federal or state regulatory requirements.

Two key provisions in the bill directly drove the issuers’ license application actions:

Accomplice asset isolation requirements

• The reserve assets of compliant stablecoins must be independently held in custody, prohibited from being mixed with the issuer’s own funds, and limited to investments in cash, short-term U.S. Treasury bonds, and other high-liquidity assets, with any re-pledging or leveraged operations strictly prohibited.
• In the event of the issuer’s bankruptcy, the reserve assets shall be prioritized for repayment to the coin holders as trust property, with priority over general creditors.

Qualification threshold for financial institutions

• The issuer must hold a federal (OCC/Federal Reserve/FDIC) or “substantially equivalent” state license; unlicensed entities are prohibited from operating in the U.S.
• Scale-based regulatory framework: stablecoin issuance ≤ 10 billion USD can opt for state license; exceeding the limit requires mandatory upgrade to federal license, otherwise must conduct balance sheet reduction.

The GENIUS bill positions stablecoins as payment tools rather than investment products through two major designs: “de-interesting” (prohibiting interest payments to users) and “technical backdoors” (mandatory built-in freezing/destroying functions), while providing law enforcement agencies with a compliant intervention channel.

As stablecoin issuers accelerate their integration into the mainstream financial system, the division between state and federal regulatory frameworks is profoundly reshaping the competitive landscape of the industry. The fragmented regulation of state-level licenses has led issuers into compliance dilemmas—taking Ripple’s RLUSD as an example, even after passing the stringent BitLicense review by the New York State Department of Financial Services (NYDFS), it still needs to spend months applying for licenses in states like California and Texas, repeating the process in each state, with application fees ranging from $50,000 to $200,000 and the establishment of localized compliance teams. The fragmented regulatory standards across states further lead to operational inefficiencies: the frequency of reserve asset audits varies from quarterly to semi-annually, with significant differences in disclosure standards, and the regulatory disparities between states force stablecoin businesses to design their operations “to the lowest standard rather than the highest.”

Ripple’s OCC application takes it a step further. It will layer federal OCC regulation on top of the existing New York State Department of Financial Services (NYDFS) regulatory framework, aiming for a “state + federal” dual regulatory structure. If its subsidiary obtains a Federal Reserve master account, the RLUSD reserves will be directly held within the Federal Reserve system. Having reserve visibility at the federal level significantly reduces the costs of cross-domain compliance, and Ripple CEO Brad Garlinghouse also stated that this will establish a “new benchmark of trust” for the stablecoin market.

The 2023 Silicon Valley Bank (SVB) crisis caused Circle to be trapped with $3.3 billion in reserves at SVB, leading to panic in the market and a brief de-pegging of USDC, nearly collapsing market confidence. The core purpose of Circle applying for a national trust bank license is to qualify for independent custody of reserves without relying on commercial banks for custody, completely eliminating the risk of a “bank run contagion chain.”

The OCC not only achieves nationwide one-time access but also reshapes the industry ecosystem through a three-tier mechanism: the stablecoin reserves are directly deposited in the central bank system, which will completely eliminate the risk of commercial bank failures and achieve real-time settlement; at the same time, it grants issuers SEC-certified “qualified custodians” qualifications to custody tokenized stocks and bonds for institutional clients, allowing Circle to participate in the digital asset custody market; more importantly, the OCC automatically covers state currency transmission licenses and uniformly applies its risk-weighted capital standards to avoid regulatory universality issues caused by differences in capital adequacy ratios among states.

The pursuit of banking licenses by stablecoin issuers is not an overnight endeavor but rather a culmination of years of compliance exploration. Taking Circle as an example, it successfully obtained the first electronic money institution (EMI) license under the EU MiCA framework on July 2, 2024, allowing it to compliantly issue USDC and euro stablecoin EURC in 27 countries. In the Middle East, Circle has obtained a principled license from the Abu Dhabi MSB, targeting key on-chain settlement scenarios for oil dollar.

The high-threshold licensing system established by local regulatory agencies has created a strong barrier to this high-cost compliance layout. For example, the substantial capital requirements (350,000 euros) and operational reserves mandated by the EU MiCA have led many small and medium-sized issuers to exit. In contrast, Circle has managed to seize the entry into the stablecoin market in the EU, which has a population of 450 million, posing a dimensionality reduction blow to its competitors.

As the license application progresses, the positioning of stablecoins has evolved from a mere medium of exchange to a core component of financial infrastructure. Circle’s Chief Strategy Officer, Dante Disparte, stated that federal regulation will make the company a “dollar on-chain executor,” reshaping the way global dollar flows.

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