XRP Empire's Ambition Exposed! Ripple Applies for Banking License to Create a "Bank Without Banks"

After years of court litigation and regulatory turmoil, Ripple has quietly built a full-stack institutional financial platform similar to a 21st-century investment bank. With the launch of Ripple Prime and the integration of Ripple Payments and Ripple Custody, Ripple is positioning itself at a growing network hub responsible for the settlement, protection, and transfer of digital coins globally.

The Transformation from Token Issuers to Financial Infrastructure Giants

(Source: DefiLlama)

For many years, Ripple has been best known for its legal disputes and the token XRP, which symbolizes the friction between cryptocurrency and the traditional financial world. After gaining legal clarity in its case with the U.S. Securities and Exchange Commission (SEC), Ripple began investing heavily to reposition itself from a blockchain company to a regulated financial infrastructure provider.

The company undertook a series of acquisitions in 2025, laying the foundation for its vertically integrated business, which covers trading, custody, payment, and liquidity management. Ripple Prime serves as the trading front end, providing over-the-counter trading services for U.S. institutional clients, a result of the prior acquisition of Hidden Road, where the two companies merged their respective licenses. Ripple Custody ensures the security of institutional assets through a combination of multi-party computation (MPC) and zero-trust architecture, integrating the technology acquired from Palisade.

Ripple Payments can handle instant settlements across multiple blockchains and fiat channels. The RLUSD stablecoin from Ripple connects all these services as a universal medium for transactions. The supply of RLUSD surpassed 1 billion dollars in November, with a month-on-month growth of over 30%, indicating that institutional demand is rapidly increasing. Interestingly, a significant portion of the demand comes from institutional counterparts using RLUSD to hedge risk exposure and settle cross-border debts.

In fact, Ripple has built a JPMorgan-like institution in the cryptocurrency space. It will provide liquidity, clearing, and Settlement services without relying on traditional banking infrastructure. The difference is that Ripple's payment channels are programmable and transparent, with every dollar and every XRP coin recorded on the blockchain. This level of transparency is something traditional banks cannot offer, making compliance audits, risk management, and real-time monitoring much easier.

Ripple 2025 Merger Timeline and Investment Scale

April: $1.25 billion acquisition of Hidden Road (major broker, obtained US license)

Mid-Year: $200 million acquisition of Rail (stablecoin payment platform supporting RLUSD)

Recently: Acquired GTreasury for 1 billion USD (enterprise financial management, entering the Fortune 500 market)

Recent: Acquisition of Palisade (Custody and wallet technology, MPC security solution)

Total Investment: Approximately 4 billion USD (including other investments and ecosystem development)

Closed-loop liquidity circulation and Apple-style walled garden

Ripple's strategy differs from its competitors in that its internal ecosystem is highly integrated. Ripple's liquidity design intentionally adopts a circular model: institutional clients trade through Ripple Prime, store assets in Ripple Custody, and make payments and settlements through Ripple Payments, all of which use XRP and RLUSD as connecting links.

The result is a closed liquidity cycle that reduces friction, increases circulation speed, and allows value to continuously circulate within Ripple's own ecosystem. Notably, this is reminiscent of Apple's perfected “walled garden” model in the consumer technology space, which enables it to control every layer from hardware to the app store. Ripple applies the same principles in the institutional finance sector. By controlling infrastructure, currency, and custody services, Ripple ensures the compliance, speed, and cost-effectiveness of its product portfolio.

This closed-loop design of business logic is extremely powerful. Every institutional client using Ripple's services will be naturally guided to use more of Ripple's services. For example, when a bank starts using Ripple Payments for cross-border transfers, it will find using RLUSD as the Settlement currency more efficient, as RLUSD natively supports Ripple's payment rails. When this bank needs to custody its digital assets, Ripple Custody is the most natural choice since it has already been seamlessly integrated with Ripple's other services. When trading or adjusting positions is needed, Ripple Prime provides a convenient trading channel.

Once this closed loop is formed, the switching costs for customers are extremely high. Leaving the Ripple ecosystem requires re-establishing connections with other service providers, migrating assets, training employees, and bearing the risks during the transition. This “lock-in effect” is the key to the success of tech giants like Apple and Amazon, and Ripple is replicating this model in the financial sector.

Ripple's approach has already shown results. Since the beginning of this year, the trading volume of XRP has surged to a multi-year high driven by widespread adoption, while the supply of RLUSD exceeded 1 billion dollars in November, with a month-on-month growth of over 30%. This rapid growth demonstrates the market's acceptance of the Ripple ecosystem.

Application for Banking License and the Regulatory Ambitions of the Federal Reserve's Main Account

It is worth noting that Ripple's pursuit of regulatory credibility is deepening this trust. The company has officially applied for a national bank charter with the Office of the Comptroller of the Currency (OCC). If approved, it will operate under dual regulation at the state (New York State Department of Financial Services) and federal levels. At the same time, Ripple is also applying for a Federal Reserve master account through its subsidiary Standard Custody. This move will allow RLUSD reserves to be held directly at the Federal Reserve, thereby eliminating intermediary risk and providing additional security.

The OCC bank license is one of the strictest financial licenses in the United States. Those who obtain it will be regarded as formal banking institutions, subject to comprehensive regulation and regular audits. If Ripple successfully obtains this license, it will become the first blockchain-native company with banking qualifications, marking a historic breakthrough. The bank license not only provides compliance endorsement but also enables Ripple to offer services that only traditional banks can provide, such as accepting deposits and issuing loans.

The Federal Reserve's master account is becoming increasingly important. This type of account allows financial institutions to store funds directly with the Federal Reserve, enjoying the highest level of security and instant payment settlement capabilities. For RLUSD, having its reserves stored directly with the Federal Reserve would completely eliminate doubts about reserve transparency. Tether has long been criticized for reserve opacity, and if Ripple can achieve direct custody with the Federal Reserve, RLUSD will significantly surpass its competitors in terms of trust.

For institutional investors who are cautious about opaque reserve systems, this combination could set a new benchmark for the transparency and trustworthiness of stablecoins. If Ripple obtains a Federal Reserve master account and an OCC banking license, it will achieve “rebellion within the walls”—disrupting traditional finance using blockchain technology while operating entirely within the regulatory framework.

The future of banking may not belong to banks at all

Ripple's grander vision seems quite clear: to replicate the core functions of global banks using crypto infrastructure. Traditional banks rely on SWIFT information and multi-day settlements, while Ripple offers near-instantaneous settlements through its blockchain-based payment track. Banks use custodians and clearinghouses for settlements, whereas Ripple embeds custodianship and settlement directly into its protocol stack. Banks issue credit and manage liquidity, while Ripple deploys its native stablecoin RLUSD to play the same role, but RLUSD is backed by short-term government bonds and cash rather than loans.

Ripple CEO Brad Garlinghouse stated, “Ripple is seeking opportunities to leverage our unique position and the advantages of XRP to transform this space on a large scale, accelerate our business development, and enhance our existing solutions and technologies.” With these layers, Ripple effectively bridges the gap between regulated finance and decentralized Settlement. Its infrastructure has supported the tokenization of real-world assets (RWA), enabling on-chain treasury funds and corporate cash to flow seamlessly like data packets.

The future of Ripple is no longer dependent on the market performance of XRP. The XRP token remains a liquidity bridge, but the company's core business is now focused on infrastructure development and institutional adoption. After RLUSD acquired GTreasury, it was able to directly enter the cash management space of the Fortune 500, opening doors for thousands of financial executives managing trillions of dollars in short-term assets. By embedding RLUSD into these workflows, it can evolve from an exchange token into a mainstream treasury tool for payments, yield optimization, and liquidity management.

Every layer of Ripple's stack strengthens the other layers: custodianship ensures the safety of funds, Prime provides liquidity, payments facilitate capital movement, and RLUSD underpins it all. With the upcoming approval of the charter from the Office of the Comptroller of the Currency (OCC) and the potential establishment of a Federal Reserve account, Ripple is one step closer to becoming the first blockchain-native institution with banking-grade permissions. In fact, it is creating a “bank without a bank” that operates entirely within the framework of U.S. financial laws.

Ripple President Monica Long succinctly articulated the company's mission. She stated that the company is dedicated to replacing traditional systems built on “walled gardens” and fragmented payment rails with open, interoperable infrastructure, thereby modernizing the way cross-border value flows. She pointed out that while decentralized finance has primarily served native cryptocurrency users to date, Ripple sees an opportunity to extend its benefits to a broader financial system and eliminate these long-standing barriers.

This actually means that companies that once fought for the legitimacy of XRP will now shape the framework of regulated crypto finance. However, whether Ripple competes with Wall Street or merges with it, its next steps point to the same conclusion: the future of banking may not belong to banks at all.

Ripple's closed-loop ecosystem utilizes RLUSD and XRP to achieve near-instant Settlement and liquidity management, thereby modernizing financial services. If this model succeeds, it will fundamentally rewrite the logic of global finance. Cross-border transfers that traditional banks take days to complete can be done in just seconds within the Ripple system. The complex Settlement processes that require multiple intermediaries in traditional banking are automated on Ripple's blockchain. While traditional banks rely on opaque internal systems, all operations of Ripple are recorded on a public blockchain that is auditable.

From a strategic positioning perspective, Ripple is becoming the “JPMorgan of the crypto world.” As the most powerful financial institution on Wall Street, JPMorgan provides a full range of services including investment banking, commercial banking, asset management, and custody. Ripple is replicating this model in the crypto space by establishing a full-stack financial platform through vertical integration. If this strategy is successful, Ripple could become the preferred partner for institutions entering the crypto market, just as JPMorgan is the preferred choice in traditional finance.