Brad Garlinghouse, CEO of Ripple, recently made a compelling case for regulatory parity between cryptocurrency firms and traditional financial institutions. He argues that if crypto companies adhere to the same stringent compliance standards as banks, they should be granted the same operational benefits and access to foundational financial infrastructure.
Advocating for Regulatory Parity
Speaking at DC Fintech Week, Garlinghouse asserted that the crypto industry is prepared to meet the rigorous demands of Anti-Money Laundering (AML), Know Your Customer (KYC), and Office of Foreign Assets Control (OFAC) regulations. However, he sharply criticized the current disparity in treatment, specifically highlighting the unequal access to crucial systems like a Fed master account. According to Garlinghouse, it is inconsistent to demand high compliance from crypto firms while simultaneously denying them access to the very tools that foster stability and clear regulation within the traditional financial landscape. He called on all stakeholders to hold traditional finance accountable for this double standard.
The Battle for Banking Access
In line with this stance, Ripple, alongside other crypto innovators like stablecoin issuer Circle and exchange Coinbase, has actively pursued national banking or trust company licenses. This ambition, however, has met significant resistance from established U.S. banking groups, who have lobbied the Office of the Comptroller of the Currency (OCC) to defer such decisions, citing "significant policy and process concerns." Garlinghouse expressed his disappointment at this pushback, reiterating that granting access to structures like a Fed master account, under the same regulatory scrutiny as traditional banks, would ultimately enhance stability and clarity for the entire financial sector. While traditional banks resist, the evolving regulatory environment has seen movement, with the OCC recently approving a license for Erebor, a Peter Thiel-backed financial services firm, signaling a potential shift in how financial services for crypto companies and users are addressed.
