- John Deaton expressed surprise that Ripple isn’t pursuing a banking license like Coinbase, Circle, Paxos, and BitGo are.
- Despite not aiming to become a bank, Ripple has secured over 55 licenses and expanded across U.S., Singapore, and Dubai.
- Ripple’s focus remains on institutional growth, exemplified by its $1.25B Hidden Road acquisition and integration of XRP Ledger.
A well-known pro-XRP attorney, John Deaton, expressed his unexpected disappointment recently when a Wall Street Journal (WSJ) report disclosed that many major crypto companies are applying to be banks — but there was no Ripple among them. In a recent X post, Deaton said, “I’m surprised not to see Ripple on that list,” referring to the likes of Coinbase, Circle, Paxos, and BitGo all exploring banking licenses.
The WSJ article described how these crypto companies plan to apply for bank licenses or charters, a development that might enable them to directly compete with banks through the provision of core financial services.
The licenses will determine their boundaries and responsibilities, depending on the agreements they reach with the regulators. Deaton clearly stated that, as far as he was concerned, the industry was already moving on that course: total competition with banks.
His surprise was likely driven by Ripple’s long-standing involvement in the the blockchain-based payment and finance ecosystem. Ripple has made significant progress in positioning itself as a serious player in the space, not just through cross-border transactions but through high-profile acquisitions like that of Hidden Road.
Ripple’s Legal Battle Halts Progress
Ripple’s current legal distractions might be one reason for its absence in the banking license race. Ripple is still partway through solving their legal issue with the U.S. Securities and Exchange Commission. In the latest development of the case, the court accepted the request from both Ripple and the SEC to put the case on hold to concentrate on the talks of settlement.
Once this case is resolved, Ripple could potentially pivot toward seeking a bank charter. For now, though, the company is clearly focused on other growth strategies, most notably its acquisition of Hidden Road for $1.25 billion — a significant move that widened its reach in institutional markets.
This move was accompanied by regulatory gains as well. Hidden Road, now owned by Ripple, obtained a recent nod from the Financial Industry Regulatory Authority (FINRA). This will enable Ripple to further extend its prime brokerage services, particularly within the fixed income segment.
55 Licenses, 2 Continents, 1 Strategy
Although the company has not expressed public interest in becoming a bank, it has been steadily constructing a robust regulatory infrastructure privately. Ripple now possesses more than 55 Money Transmitter Licenses (MTLs), including key financial hubs New York and Texas. These licenses allow Ripple to facilitate cross-border transactions as well as support both XRP and its stablecoin RLUSD.
Globally, Ripple has obtained a Major Payments Institution license from the Monetary Authority of Singapore, as well as a license issued by the Dubai Financial Services Authority (DFSA). It now has the permission to provide regulated crypto payment capabilities both across Southeast Asia as well as within the Middle East.
At the same time, the XRP Ledger will include the implementation of Hidden Road as an instrument for the securities transaction process. It was disclosed by the Ripple team that XRPL is going to support Hidden Road’s back-end functions after the deal. This has now been officially confirmed by Ripple executive Cassie Craddock.
