Ripple Labs’ ambitious move to establish a national trust bank has ignited a fierce backlash from the U.S. banking sector. The Independent Community Bankers of America (ICBA), which represents roughly 5,000 community banks across the nation, submitted a formal objection letter to the Office of the Comptroller of the Currency (OCC) on August 4, 2025. The ICBA argues that Ripple’s plan to manage reserves for its RLUSD stablecoin through the proposed Ripple National Trust Bank (RNTB) goes far beyond the traditional scope of trust banks and threatens to blur institutional boundaries.
Key Objections from ICBA
In its detailed letter, the ICBA contends that Ripple’s proposal to offer RLUSD with dollar redemption and payment functionality effectively recreates the role of a deposit-taking institution — a function that is legally restricted for trust banks. “Ripple Labs and RNTB appear to be replicating a bank’s depository functions without obtaining a full bank charter,” the ICBA stated. The association warned that allowing such deposit-like instruments to operate could “drain deposits out of the banking system,” destabilizing the financial landscape.
Furthermore, the ICBA accused the OCC of exceeding its authority by allowing stablecoin issuers to use the national trust bank charter without adhering to full-service bank requirements. The group emphasized that the OCC had not followed formal rulemaking procedures under the Administrative Procedure Act when expanding trust bank powers to cover non-fiduciary activities like stablecoin issuance. The letter reads: “The OCC should not allow stablecoin issuers to use the national trust bank charter to benefit from full-service bank-powers without full-service bank-requirements.”
The ICBA also highlighted significant risks tied to the cryptocurrency ecosystem, including fraud, money laundering, and cybercrime. It pointed to Ripple’s past regulatory violations — a settlement over anti-money laundering lapses and a $125 million penalty for securities law violations — as grounds for denying the application. “The cryptocurrency ecosystem is fraught with significant risks related to fraud, money laundering, and cybercrime, posing substantial challenges for any institution, such as RNTB, seeking to provide custodial services for digital assets,” the ICBA warned.
In its conclusion, the ICBA issued a stark warning: “Granting RNTB’s national trust bank charter would undermine the stability of the financial system by allowing a non-traditional institution to offer deposit-like services without adequate regulatory oversight, threatening consumer protections and the integrity of the banking sector.”
Industry Reactions and Outlook
While some blockchain advocates argue that specialized custodial trusts can modernize finance, the ICBA insists that the risks outweigh any potential benefits without strict regulatory parity. Ripple has previously stated that obtaining a national trust bank charter would help legitimize its RLUSD stablecoin and build trust among regulators and market participants. However, with powerful traditional banking groups pushing back, the OCC’s review process may face significant delays. As of now, the OCC has not issued an official response to the ICBA’s objections or to Ripple’s application. The outcome of this battle could set a critical precedent for how stablecoin issuers are regulated in the United States.