Ripple is facing resistance from traditional financial institutions as it seeks to integrate into the U.S. banking system. The company's CTO, David Schwartz, has voiced his perspective on this situation, framing it as a battle for progress.
Reaction of Traditional Finance
The American Bankers Association has called for regulators to freeze crypto bank license approvals, including those for Ripple and Circle. David Schwartz commented on the actions of the Association, noting that established institutions aim to stall progress in fintech.
> I often joke that successful incumbents would pause all progress if they could. > > — David 'JoelKatz' Schwartz (@JoelKatz)
Ripple's Banking License Application
A significant step for Ripple has been the filing of applications for a national banking license in the U.S. and a master account with the Federal Reserve. These filings were made through Standard Custody, a trust company acquired by Ripple last year. The goal of these steps is to integrate into Federal Reserve-level financial infrastructure.
Prospects and Consequences
The situation surrounding Ripple's application represents a broader struggle for blockchain companies to access the same financial resources that traditional banks take for granted. Now, the OCC and the Federal Reserve must make a defining decision: to allow digital-first firms access to the core or to delay them at the request of old-timers.
The question of access to the banking system for cryptocurrency companies remains relevant. The regulators' decision may define the future for both Ripple and the entire financial sector.
