Ripple Labs is expanding its presence in the European market with its RLUSD stablecoin.
San Francisco-based blockchain payments firm Ripple Labs Inc has decided to push its USD-pegged stablecoin RLUSD into the European market. It is focused explicitly on entering the region through Luxembourg under the almost seven-month-old Market in Crypto Assets (MiCA) regulation. This move is likely to expand RLUSD’s use cases across different jurisdictions significantly.
Ripple Puts Compliance First for Its RLUSD Stablecoin
Ripple is trying to establish RLUSD as a cross-border settlement stablecoin that is fully compliant with regulations. According to a report from Ledger Insights, the blockchain payment firm is planning to expand into the European market with RLUSD. It is worth noting that the company already has a presence in Europe.
In April, the blockchain payment firm established Ripple Payments Europe SA in Luxembourg. This was the beginning of its EU expansion process. Now, it is seeking an Electronic Money Institution (EMI) license for RLUSD. Though the authorities will issue it in Luxembourg, this approval will make it legal to conduct business throughout all 30 European Economic Area (EEA) nations with RLUSD.
There are projections that the deal will be handled by the Luxembourg-based Ripple Payments Europe SA. One Ripple spokesperson highlighted that the company is more keen on working with regulators rather than circumventing them. Being in Luxembourg comes with certain benefits for Ripple.
This country is primarily recognized for being home to numerous global banks. One such financial institution is Ripple’s partner, BNY Mellon. It is worth noting that BNY Mellon was selected a week ago to manage the reserves backing RLUSD. Like its push into Europe, the move is expected to help Ripple meet regulatory standards while attracting more confidence from big companies and institutions.
The strong network of banks and the extensive international banking ecosystem in Luxembourg make it an exceptional region for regulation. RLUSD can leverage them to meet EU rules, especially those that require stablecoin issuers to keep significant and diverse reserves across different institutions.
Ripple Paves Clear Regulation Path for RLUSD
Apart from expanding in Europe, Ripple is also making an effort to be more compliant with regulations in the United States. In the first week of July, it officially applied for a US national banking license with the Office of the Comptroller of the Currency (OCC), placing Ripple at the forefront of regulatory convergence in the crypto space.
The firm’s CEO, Brad Garlinghouse, claimed that obtaining a banking license would mark a “new (and unique!) benchmark for trust” in the stablecoin sector. Already, RLUSD is regulated by the New York Department of Financial Services. These other approvals that Ripple is after are to ensure compliance across different jurisdictions.
Meanwhile, an OCC charter positions Ripple with Circle, the issuer of the USDC stablecoin, in seeking direct federal oversight under the GENIUS Act. To also hold RLUSD reserves directly with the Fed, the crypto company applied for a Master Account with the US Federal Reserve via Standard Custody.
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