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Ripple Applies for U.S. National Bank Charter to Advance Crypto Integration

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Crypto firm Ripple has submitted an application for a U.S. national bank charter, aiming to deepen its integration with the traditional financial system and gain regulatory clarity, CEO Brad Garlinghouse announced on Wednesday. This move follows a similar step by stablecoin issuer Circle, signaling growing momentum among crypto firms to enter the regulated banking space.

Obtaining a national charter from the Office of the Comptroller of the Currency (OCC) would enable Ripple to settle payments more quickly and at lower costs by reducing reliance on intermediary banks. The OCC confirmed receipt of Ripple’s application. Additionally, Ripple is seeking a Federal Reserve Master account to directly access the Fed’s payment infrastructure and hold stablecoin reserves with the central bank, as Garlinghouse detailed on social media.

Ripple’s stablecoin, RLUSD, launched in October 2024, currently holds a market value near $470 million, placing it among the larger stablecoins, though still smaller than dominant players like Tether and Circle’s USD Coin. The timing aligns with increased regulatory attention on stablecoins, particularly after the U.S. Senate passed the GENIUS Act, which industry experts say will foster safer adoption by clarifying regulations.

Circle also recently applied for a national trust bank charter shortly after its strong IPO, reflecting a broader industry push to legitimize and scale crypto payment systems through traditional finance channels.

Grayscale, a major digital asset manager, praised the GENIUS Act, stating it is likely to enhance stablecoin adoption in the U.S. while maintaining safeguards for consumers and financial stability.

Fed-BIS Report Finds Monetary Policy Still Effective in Tokenized Financial Systems

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A joint research project between the New York Federal Reserve and the Bank for International Settlements (BIS) has concluded that central banks can effectively conduct monetary policy—and potentially do so more efficiently—in a tokenized, decentralized financial environment, according to a report released on Wednesday.

The findings stem from Project Pine, a prototype initiative developed by the New York Fed’s Innovation Center and the BIS Innovation Hub, aimed at evaluating whether digital tools and blockchain-based systems could support core monetary operations in a future financial system dominated by tokenized assets.

Key Takeaways:

  • The prototype system was able to instantaneously execute monetary policy operations in response to simulated market conditions, preserving central banks’ ability to manage liquidity and interest rates.

  • The report suggests that smart contracts could allow central banks to rapidly deploy or adjust monetary policy tools, making operations more responsive in times of uncertainty.

  • Tokenization refers to digital representations of assets on blockchain platforms, increasingly used in decentralized finance (DeFi) and being explored by wholesale financial markets.

“Future operations could be nimbler in uncertain conditions and potentially reduce frictions between the time of announcements and offerings,” the report noted.

Future Implications for Central Banks:

While there is currently no immediate threat to how central banks implement policy, the report acknowledges that widespread tokenization in wholesale markets could demand participation in new financial infrastructures and interaction with digital tokens to remain effective.

It also points to the growing operational complexity of monetary policy in a hybrid financial system, where automation may need to complement—though not entirely replace—human judgment.

“If the private financial sector adopts tokenization on a broad scale… central banks may need to adapt to novel market infrastructures,” the report states.

Strategic Preparation, Not Reaction

The findings are part of preparatory research to ensure central banks remain capable of navigating an evolving financial landscape. The system tested was not tailored to any specific central bank but was designed to mimic standard monetary operations such as repo transactions, liquidity injections, and interest rate targeting.

While decentralized financial technologies may present new risks, they also offer opportunities for streamlining operations, reducing time lags, and enhancing precision in policy deployment.

European Central Bank Joins Bluesky, Rival to Elon Musk’s X

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The European Central Bank (ECB) has started posting on the Bluesky platform, a competitor to Elon Musk’s X, formerly known as Twitter. The ECB’s move to join Bluesky comes as Musk intensifies his political campaigning in Europe, including urging voters in Germany to support a far-right party. Bluesky is one of several platforms attempting to challenge X’s dominance following Musk’s acquisition of the site.

An ECB spokesperson explained that the central bank aims to diversify its social media presence and had started engaging with several new platforms last year, making Bluesky the latest addition. The ECB’s initial post on Bluesky included an interview with its chief economist, Philip Lane, which was also shared on X. The ECB plans to continue using X alongside its new presence on Bluesky.

Musk’s political influence on X has been controversial, with critics accusing the platform of enabling the spread of misinformation. Recently, Musk hosted the leader of Germany’s far-right Alternative for Germany (AfD) party on X, an interaction that the European Commission has stated it will monitor for disinformation. Musk has also supported Italy’s right-wing Prime Minister, Giorgia Meloni.

In contrast, the ECB, under President Christine Lagarde, has focused on issues like gender equality and climate change. Musk, a vocal critic of diversity, equity, and inclusion policies, has also been outspoken against climate change efforts, supporting figures like former President Donald Trump, who has labeled climate change a hoax. Musk’s stance on the Federal Reserve has been similarly critical, calling the institution “absurdly overstaffed” and advocating for its dissolution.

Despite Bluesky’s recent growth, with 2.5 million new users added after Trump’s election, it remains much smaller than its competitors. Threads has around 252 million monthly active users, while X has approximately 317 million, according to Sensor Tower data. However, Bluesky has faced challenges with EU regulators, who criticized the platform last year for not providing essential details about its user base in the region.