XRP Lawyer Condemns ABA Move to Block Ripple And Circle Bank Licenses

John Deaton has launched a fierce response against the American Bankers Association (ABA) following its recent plea to the U.S. Office of the Comptroller of the Currency (OCC) to halt federal trust charters for crypto firms, such as Ripple and Circle. 

Ripple and Circle Face Fresh Resistance From Banking Lobby

In a recent X post, Deaton directly addressed policymakers, telling them to ignore what he called obstructionist efforts from the American Bankers Association. His criticism followed a formal request by the ABA and five other industry groups, including America’s Credit Unions and the National Bankers Association. They urged the OCC to delay crypto trust charter approvals until broader public scrutiny is possible.

Top expert Vincent Van Code also echoed Deaton’s sentiment, labeling the move as “purely anti-competitive.” He argued that digital-first companies like Ripple and Circle are modernizing finance by reducing overhead and bureaucracy.

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Ripple had filed for a national banking license with the OCC, a move designed to integrate its stablecoin and payment services more deeply into the mainstream financial system. Similarly, Circle also applied to function as a national trust bank subject to federal regulation. Reserves for Circle’s flagship stablecoin, USDC, would be partially held by the new organisation, First National Digital Currency Bank.

Banking Groups Cite Legal Gaps and Systemic Risk

At the heart of the ABA’s argument is a claim that national trust bank charters should only go to firms that engage in fiduciary activities as historically required under 12 U.S.C. § 92a. According to the ABA, neither Ripple nor Circle plans to provide these traditional services. Instead, they seek access to federal banking privileges, while focusing primarily on digital asset custody and payments.

The letter warned that granting these applications could set a dangerous precedent, allowing non-fiduciary crypto firms to bypass the Bank Holding Company Act and other rules that regular banks must follow. The groups also raised concerns about possible “copycat” applications, predicting that dozens of digital asset firms could follow Ripple and Circle into the banking system without meeting the same regulatory obligations.

Ripple and Circle’s push for a banking license aligns with the GENIUS Act, passed in July 2025, which requires stablecoin issuers to operate under federal oversight, either as banks, credit unions, or specially chartered non-banks supervised by the OCC. Seeking these licenses could help both Ripple and Circle meet compliance standards and expand their offerings.

However, the ABA believes this would lead to some discrepancies. They further criticized the OCC’s past interpretive guidance, especially the now-rescinded Interpretive Letter 1179, which had allowed broader, case-by-case definitions of fiduciary activity. The ABA now insists on a return to clearer, more restrictive standards: “no fiduciary work, no trust charter.”

Critics from the banking sector insist these applications threaten systemic stability and violate the original intent of federal trust charters. Meanwhile, supporters like Deaton argue that blocking Ripple and Circle undermines innovation and competition, keeping the financial system tied to outdated models.