Ripple & Circle’s Bank License Dreams Clash With ABA’s Regulatory Wall

Crypto giants hit regulatory turbulence as traditional finance pushes back.

Ripple and Circle—two of crypto's most vocal advocates for bridging decentralized and traditional finance—just ran headfirst into the American Bankers Association's brick wall. The ABA's opposition to their national bank charter applications signals yet another showdown between disruptive fintech and legacy gatekeepers.

Banking's old guard flexes regulatory muscle

The ABA's move exposes the simmering tension between crypto-native companies seeking legitimacy and institutions determined to maintain the status quo. No numbers were disclosed—just good old-fashioned bureaucratic resistance.

When crypto meets compliance

This isn't about technology anymore—it's about power. The ABA's objection reads like a playbook move from an industry that still thinks 'blockchain' is a type of ski binding. Meanwhile, Ripple and Circle must navigate regulations written before Satoshi's whitepaper while bankers count their 0.25% interchange fees.

TLDR

• The American Bankers Association has opposed Ripple and Circle’s applications for national trust bank charters.
• XRP advocate John Deaton has condemned the ABA’s actions and called for lawmakers to reject their recommendations.
• Ripple seeks to expand its payment and stablecoin services under a federal trust charter aligned with the GENIUS Act.
• Circle aims to create a digital currency bank that would manage USDC reserves under direct federal supervision.
• The ABA argues that Ripple and Circle do not perform fiduciary services required for trust charter approval.

The ongoing rift between digital finance and traditional banking has intensified as the ABA opposed federal licenses for Ripple and Circle. The ABA urged regulators to reject both firms’ trust charter applications, sparking backlash from leading crypto advocates. The confrontation marks a turning point in the regulatory path for blockchain firms seeking national legitimacy.

Ripple’s Federal Push Faces Resistance

Ripple applied for a national trust bank charter to expand its payments and stablecoin offerings under federal oversight. This MOVE follows the enactment of the GENIUS Act, which mandates direct federal regulation for stablecoin issuers. Ripple aims to align its operations with this requirement by operating under the U.S. Office of the Comptroller of the Currency (OCC).

Despite this, the American Bankers Association (ABA) and five other financial groups opposed the application. They argued that Ripple does not perform fiduciary services, as required under federal law. The ABA referenced 12 U.S.C. § 92a, which limits trust charters to firms offering estate or asset management.

The ABA claimed that granting Ripple a charter could bypass rules enforced under the Bank Holding Company Act. They asserted that allowing access to the banking system without such oversight could weaken regulatory parity. They maintained that Ripple’s application challenges the original intent behind trust bank designations.

Crypto lawyer John Deaton rejected these claims and criticized the ABA’s stance as regressive. He said blocking Ripple’s entry WOULD hinder technological progress and maintain outdated financial structures. He called on lawmakers to protect innovation and not obstruct the future of finance.

DEAR @SecScottBessent, @DavidSacks @davidsacks47 @BoHines:

Please tell @ewarren’s friends at the American Bankers Association to F off. https://t.co/7yPEziQ3SE

— John E Deaton (@JohnEDeaton1) July 22, 2025

Circle’s USDC Plans and Regulatory Challenge

Circle, the issuer of USDC, submitted its application to FORM the First National Digital Currency Bank. The company’s goal is to hold stablecoin reserves under direct federal regulation, complying with the GENIUS Act. This legal framework requires all stablecoin issuers to seek national-level licensing or equivalent oversight.

The ABA insisted Circle’s services do not meet fiduciary standards necessary for a trust bank license. They warned that approving Circle could lead to similar applications from other crypto firms. These new entrants, they argued, could disrupt the regulatory balance within the traditional banking sector.

Industry voices supported Circle, saying it ensures transparency and operational security under federal jurisdiction. Technology experts also emphasized Circle’s role in reducing financial inefficiencies through blockchain integration. Despite this, the banking lobby remains firm in preserving current charter conditions.

Both Ripple and Circle continue to push for regulatory inclusion despite mounting opposition. The outcome may significantly influence how digital finance evolves in federal banking frameworks.