Ripple Breaks Down Stablecoin Rules as Institutions Evaluate RLUSD

Ripple Explains the Rules Behind RLUSD

Protections for stablecoin holders depend on the issuer’s actual license, reserve requirements, and supervision, Ripple argued in a Sept. 11 blog post. The digital asset infrastructure company outlined how money transmitter licenses, state trust charters, and federal supervision differ as institutions assess stablecoin Ripple USD (RLUSD) for payments, settlement, and treasury operations.

This distinction affects how dollar-backed tokens maintain their backing and how holders can exchange them for cash. Such stablecoins typically use reserves to support their dollar value, but reserve quality and redemption arrangements influence their risks. Ripple stated:

“A money transmitter license, a state trust charter, and prudential supervision by a banking regulator all involve government oversight, but they carry different capital requirements, different reserve rules, and different consequences if an issuer fails.”

RLUSD is issued by Ripple subsidiary Standard Custody & Trust Company under a New York Department of Financial Services limited-purpose trust charter. Its framework includes segregated reserves and independent attestations, which examine reserve disclosures. Ripple selected BNY as primary reserve custodian in July 2025 and said it would also use the transaction banking services of The Bank of New York Mellon Corp. (NYSE: BK).

Federal Bank Approval Remains Conditional

The proposed federal component would give a separate Ripple trust bank responsibilities involving reserves backing the stablecoin. Ripple received conditional approval to establish Ripple National Trust Bank in December 2025. Its Sept. 11 explanation describes that decision as an intermediate step, with the federal chartering process still subject to completion.

The Office of the Comptroller of the Currency’s approval letter specifies that authorization to begin business depends on satisfying all preopening requirements. The proposed bank would manage RLUSD’s segregated reserves on a directed basis and perform collateral trustee services for holders. Standard Custody would remain the issuer under New York supervision, while the separate bank would assume its approved federal responsibilities.

More broadly, the chartering push also involves other digital asset businesses seeking federal supervision for trust and custody activities. Ripple’s was one of five crypto-related trust bank applications the OCC conditionally approved on Dec. 12, 2025, alongside institutions associated with Circle, Bitgo, Fidelity, and Paxos. Those decisions included both new bank applications and conversions of existing state trust companies.

CFTC Collateral Rules Serve a Separate Purpose

The treatment of stablecoins as trading collateral raises a separate regulatory question from supervision of their issuers. The Commodity Futures Trading Commission (CFTC) announced a digital assets collateral pilot on Dec. 8, 2025. Its staff no-action position allows futures commission merchants, intermediaries handling customer derivatives accounts, to accept qualifying digital assets as margin collateral under specified conditions.

Ripple characterized the staff position as conditional relief governing collateral treatment, rather than an endorsement or ranking of stablecoins. A no-action position means staff will not recommend enforcement over specified conduct when its conditions are met. Participating firms face reporting and risk-management obligations; those requirements address how collateral is handled within derivatives accounts.

Institutional use of blockchain-based cash also extends to bank deposits, with Ripple Prime participating in BNY’s tokenized deposit rollout. In January, Ripple identified its prime brokerage business as an early adopter of BNY’s tokenized deposit services. The service mirrors participating customers’ deposit balances on a private blockchain, with initial applications focused on collateral and margin workflows.

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