U.S. National Trust Banks Become the New Battleground for Stablecoins: Regulation Trends, Circle, Ripple, Paxos, and Coinbase in Banking Integration

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#Stablecoin #Circle #Ripple

If 2021–2023 was the era of expansion for stablecoins, then post-2025 marks the era of belonging — belonging to a regulatory framework, a trust structure, a jurisdictional system. This is precisely why every major stablecoin issuer is now competing for one credential: the U.S. National Trust Bank Charter.

From Regulatory Gray Zones to Institutional Legitimacy

Following two landmark policy signals from the OCC (Office of the Comptroller of the Currency) in March and August 2025, the regulatory landscape shifted dramatically:

• Federal banks and savings associations are now authorized to engage in crypto asset custody, limited stablecoin issuance, and independent node validation.
• Community banks are encouraged to collaborate with crypto firms to co-develop financial products.

This was not a “loosening” of policy — it was an institutional invitation. The OCC effectively opened a legal gateway to crypto banking: if you operate within the rules, the U.S. can recognize you as a bank.

 

Circle Leads the Charge: From USDC to the “National Digital Currency Bank”

Among all players, Circle made the boldest and most symbolic move. On June 30, 2025, it formally filed with the OCC to create “First National Digital Currency Bank, N.A.” This would be a digital asset bank — not accepting cash deposits or offering loans, but authorized to custody crypto assets and manage USDC reserves on behalf of institutional clients.

This move redefines what a stablecoin issuer is. Previously, issuers were merely technical intermediaries: issuing tokens, managing reserves, and relying on the traditional banking system. Now, Circle seeks to become the banking node itself.

That means:

• USDC reserves will be custodied by Circle’s own trust structure, not by partner banks.
• Trust management shifts from outsourced confidence to internal sovereignty.
• It also lays the foundation for Circle’s future in stock and bond custody.

As CEO Jeremy Allaire put it:“We’re not trying to become a bank — we’re trying to make it safe for institutions to use digital dollars under a regulated framework.”

That statement hits the core of this transformation: for a decade, crypto firms tried to avoid regulation; post-2025, they are competing to embrace it.

Ripple: Bringing Stablecoins Into the Fed’s Master Account

Long known for regulatory friction, Ripple has always excelled at navigating legal gray zones. On July 3, CEO Brad Garlinghouse confirmed on X that Ripple is applying for a National Trust Bank Charter and pursuing Federal Reserve Master Account access.

This is a far more profound move than it appears. If approved, Ripple would not only custody reserves for its stablecoin RLUSD, but also gain direct access to the Fed’s payment system. That would make RLUSD not just an on-chain dollar, but a “dollar shadow” within the federal clearing network.

Garlinghouse called this “a new benchmark for stablecoin trust” — in other words, he aims to make stablecoins bank-grade financial products. Strategically, Ripple’s goal isn’t merely to issue RLUSD — it’s to rebuild the cross-border settlement layer, creating a “bank-grade SWIFT” powered by crypto.

If Circle is building the payment layer of the digital dollar, Ripple aims to build the settlement layer.

Paxos and Coinbase: Rebuilding the Trust Architecture

Paxos’ story feels like a homecoming. It had already received conditional OCC approval in 2020 but lost it in 2023 due to procedural lapses. Now, it’s reapplying — clearly intent on re-entering the mainstream regulatory framework.

For Paxos, trust trumps innovation. After its experience with Binance’s BUSD, it learned the cost of regulatory friction. A National Trust Charter would free it from New York State’s limited jurisdiction and allow nationwide clearing operations.

Coinbase, on the other hand, approaches this as strategic positioning. Already holding a digital asset custody license, Coinbase’s trust bank application isn’t about becoming a traditional bank — it’s about streamlining institutional settlement. VP Greg Tusar said this will enable Coinbase to “innovate continuously within a clear regulatory perimeter.”

In essence, Coinbase is evolving from a trading platform to a regulated financial services conglomerate, building the legal foundation for ETF custody, crypto settlement, and on-chain payments.

The Payment Giants’ Stablecoin Ambitions

When Stripe acquired Bridge in 2024, most saw it as a Web3 infrastructure play. But when Bridge filed for a National Trust Bank Charter, the real strategy emerged: Stripe doesn’t just want to embrace crypto — it wants to control it.

Co-founder Zach Abrams stated:“We’re turning stablecoins into regulated core financial primitives.”

That means Stripe is building a new payment infrastructure model:

• Businesses issue their own stablecoins via Bridge.
• Reserves and settlements are custodied within Bridge’s banking framework.
• Stablecoins are natively integrated into Stripe’s payment network.

This model aligns closer to traditional finance than to Circle’s or Ripple’s approaches. Stripe isn’t just issuing tokens — it’s rebuilding the middle layer of the U.S. dollar payment stack. That’s why Phantom’s CASH, MetaMask’s mUSD, and Hyperliquid’s USDH all chose Bridge as an issuance partner.

Why Everyone Wants the Same Charter

Because this charter is the OCC’s highest-level crypto financial license — a national trust bank designation that carries:Broader legal authority than state-level trust licenses, Wider service scope and interstate recognition, Direct access to federal payment and settlement networks.

• Without it, even the largest stablecoin firms remain “shadow banks.
• With it, they become participants in the U.S. financial system — able to clear, custody, and collaborate institutionally.

This isn’t just about compliance — it’s about hierarchy. In the coming decade, the leading stablecoin won’t be the one with the biggest market cap, but the one that’s chartered.

Revisiting the GENIUS Act

Since the enactment of the GENIUS Act, U.S. regulators have, for the first time, defined stablecoins systematically:
Only three types of entities may legally issue them:

1. Federally chartered banks,
2. Nonbank trust institutions regulated by the OCC,
3. State-licensed issuers with circulation below $10 billion.

This creates a three-tier regulatory architecture:

• Top tier: Federal license (Circle, Ripple, Paxos are applying)
• Middle tier: State-level oversight (e.g., NYDFS)
• Bottom tier: Restricted issuers (small projects)

Law firm Winston & Strawn summarized it best:“The Act incentivizes stablecoin issuers to climb upward, because state licenses alone can’t support nationwide operations.”

In other words, the GENIUS Act is pushing crypto companies from ‘quasi-banks’ to true banks.

Beyond Compliance: A Structural Convergence

This wave of applications marks more than regulatory adaptation — it’s the crypto industry’s active integration into the U.S. financial system. For a decade, decentralization was about resisting financial centralization. Now, stablecoin giants are pursuing reciprocal centralization — entering the system to achieve legitimacy.

It’s a decentralization correction movement. The boundaries between DeFi, CeFi, and TradFi are fading.

• Circle becomes a licensed digital currency bank;
• Ripple connects to the Fed’s payment rail;
• Stripe’s Bridge powers on-chain payments.

The crypto world is no longer a parallel financial system — it’s embedding itself into the core of mainstream finance.

Who’s Most Likely to Get Approved First?From a compliance standpoint:

• Circle: clear business focus and strong regulatory record — most likely to be approved first.
• Ripple: strong technology but ongoing legal baggage — uncertain.
• Paxos: regulatory reconciliation experience — likely next phase approval.
• Coinbase: steady institutional custody play — low-risk, gradual approval.
• Bridge (Stripe): positioned more as a payment integrator, not an issuer.

As Galaxy Digital’s Alex Thorn observed:“In the future, stablecoin issuers will look more like banks — and banks will look more like stablecoin issuers.”

Conclusion: Bankification Is Not the End — It’s the Beginning

This “charter race” isn’t just about meeting regulatory requirements — it’s the pathway to a systemic trust upgrade:

• Future stablecoins won’t rely on banks — they will be banks.
• Future crypto payments won’t exist outside finance — they’ll be embedded within it.
• The future U.S. dollar won’t be paper — it’ll be a regulated, trusted, and settled on-chain symbol.

As the financial core shifts from bank accounts to smart contracts, and regulators evolve from rejecting innovation to designing it, the bankification of stablecoins may, in fact, be the true beginning of the U.S. dollar’s digital era.