The American Bankers Association (ABA) has expressed its stance against granting federal bank charters to Ripple and Circle. This decision raises questions about the alignment of their business plans with traditional fiduciary standards.
ABA's Opposition to Ripple and Circle Charters
The American Bankers Association (ABA) is opposed to granting federal bank charters to Ripple and Circle. This statement comes in light of concerns regarding the applicants' business plans not aligning with traditional fiduciary standards. ABA has formally requested the Office of the Comptroller of the Currency to delay consideration of these crypto-facing charters.
Tension Between Banks and Crypto Industry
This decision has already led to increased tensions between traditional banks and the crypto industry, raising concerns about the discriminatory treatment of digital asset firms. It could have broad implications for other companies seeking similar charters.
> "There are serious legal and policy uncertainties about whether the applicants’ business plans align with fiduciary standards traditionally upheld by national trust banks," said the American Bankers Association.
Future Regulatory Implications
Potential regulatory outcomes may lead to greater scrutiny of crypto businesses applying for bank charters. Historical data indicates that successful charters, like for Anchorage Digital, are rare. The outcome of this contention may set a precedent for future applications.
Thus, the ABA's stance on licenses for Ripple and Circle highlights growing disagreements between traditional financial institutions and crypto companies, also raising new questions about the future regulation of the crypto industry.
