{"id":47767,"date":"2025-09-16T11:02:10","date_gmt":"2025-09-16T11:02:10","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=47767"},"modified":"2025-09-16T11:02:10","modified_gmt":"2025-09-16T11:02:10","slug":"ripple-wont-get-fed-master-account-says-caitlin-long","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=47767","title":{"rendered":"Ripple Won\u2019t Get Fed Master Account, Says Caitlin Long"},"content":{"rendered":"
\n

Caitlin Long, the CEO of Wyoming-chartered Custodia Bank, delivered a stark assessment of crypto\u2019s path to the Federal Reserve\u2019s rails, arguing that firms operating under trust charters\u2014including Ripple\u2014will not be granted direct access to the Fed\u2019s payment system unless they become true depository institutions.<\/p>\n

\u201cStablecoin issuers are not legally depository institutions,\u201d she said<\/a>. \u201cTo be able to use Fedwire and ACH, the Fed has taken the position that you have to be a depository institution\u2026 A trust company by law is prohibited from accepting a US dollar deposit.\u201d She added that while some trust companies have historically had limited master-account arrangements, it was \u201cnot for moving money in the payment system,\u201d and the key prize\u2014\u201cthe par guarantee\u201d\u2014belongs to banks alone. \u201cYou\u2019ve got to legally be a depository institution,\u201d Long said, concluding, \u201cI firmly do believe\u2026 the Fed is not going to change that.\u201d<\/p>\n

Long\u2019s view arrives as Ripple pushes deeper into bank-grade infrastructure. Ripple closed its acquisition of Standard Custody & Trust Company<\/a> in June 2024, positioning the New York-chartered trust company at the center of its stablecoin stack, and has continued to expand its regulated footprint since then.<\/p>\n

In early July 2025, Ripple applied for a US national bank charter<\/a> and is pursuing a Federal Reserve master account\u2014moves that would, if approved, put Ripple USD (RLUSD) reserves and settlement closer to the Fed\u2019s balance sheet and its payment services. Long\u2019s message to that strategy is unambiguous: trust status is an \u201cintermediary stop.\u201d \u201cThere have been several now who have applied for Fed master accounts,\u201d she said, but access to Fedwire\/ACH \u201cis the distinction,\u201d and \u201cthe stablecoin market, I firmly believe, will go entirely to the banks.<\/p>\n

Can Ripple Get A Fed Masters Account?<\/h2>\n

The Fed\u2019s legal and policy framework backs up the distinction Long describes. In August 2022, the Board finalized its Account Access Guidelines, which formalized a three-tier review system and made clear that Reserve Banks evaluate requests for access to \u201cmaster accounts and services\u201d against safety-and-soundness, legal eligibility, and systemic-risk criteria. The framework subjects non-insured, novel charters to the most stringent review.<\/p>\n

Separately, the Federal Reserve defines a master account as \u201cthe record of financial rights and obligations\u201d between an account holder and its Administrative Reserve Bank\u2014precisely the ledger relationship that enables par settlement on Fed rails.<\/p>\n

Courts have since affirmed broad Fed discretion to deny master-account requests even for legally eligible institutions, a precedent set in 2024 rulings that rejected arguments the Fed must grant access upon request. That judicial backdrop is central to Long\u2019s claim that policy won\u2019t bend for trust companies: \u201cI have had very extensive conversations with the actual decision makers,\u201d she said, and the line drawn around deposit-taking banks \u201cis not going to change.\u201d<\/p>\n

Naming names clarifies where crypto stands today. The Federal Reserve\u2019s public Master Account and Services Database\u2014updated most recently with data current as of May 31, 2025\u2014lists new \u201caccess requests\u201d and their status, offering an official window into who is asking to join the payment system directly. A Congressional Research Service report, citing that database, notes that Kraken Financial and Protego Trust have pending applications, while Bankwyse, Commercium Financial (a Wyoming SPDI) and Paxos withdrew theirs; Custodia\u2019s request was denied<\/a>.<\/p>\n

After that, Standard Custody & Trust (Ripple-owned) and WisdomTree Digital Trust have entered the crypto-adjacent access requests, underscoring the sector\u2019s shift toward bank-grade plumbing even as eligibility questions remain for trust companies.<\/p>\n

Long, for her part, emphasized the legal dividing line those lists reveal: \u201cAll these trust companies, including OCC trust companies, [are] not eligible to get access to the payment system for moving US dollar deposits\u2026 Getting access to Fedwire and ACH at the Fed, you\u2019ve got to legally be a depository institution.\u201d<\/p>\n

Her argument turns on first principles rather than policy mood. \u201cWhat is a depository institution? It is a financial institution that is legally authorized to accept a US dollar deposit,\u201d Long explained. Because trust companies are \u201cprohibited from accepting a US dollar deposit,\u201d the Fed\u2019s payment system remains a bank-only lane. The consequence, she said, is structural: \u201cThese trust companies\u2026 are intermediary stops. That\u2019s great\u2026 [they] give companies the ability to do business nationwide\u201d without fifty separate money-transmitter licenses. \u201cBut\u2026 not for moving money in the payment system.\u201d<\/p>\n

In Long\u2019s telling, stablecoin-issuance will ultimately consolidate \u201centirely\u201d inside banks\u2014some of which may be crypto-founded but will nevertheless be banks\u2014because only banks can tap the Fed\u2019s par-clearing privilege at scale. For Ripple, the path forward therefore looks binary. The trust-company architecture around Ripple USD can support custody and fiduciary functions; it cannot, in Long\u2019s reading and the Fed\u2019s rule set, unlock direct Fedwire\/ACH access on its own.<\/p>\n

That explains Ripple\u2019s pivot toward a national bank charter and a master-account application\u2014steps that, even if they clear eligibility, must still pass the Fed\u2019s risk-based scrutiny that tripped other applicants. In the meantime, Long\u2019s bottom line hangs over every trust-charter strategy in crypto: \u201cThe value of moving money in the payment system? It\u2019s the par guarantee.\u201d And that, she insists, \u201cwon\u2019t\u201d be available to trust companies\u2014Ripple included\u2014unless they become banks.<\/p>\n

At press time, XRP traded at $2.98.<\/p>\n

\"XRP<\/div>\n","protected":false},"excerpt":{"rendered":"

Caitlin Long, the CEO of Wyoming-chartered Custodia Bank, delivered a stark assessment of crypto\u2019s path to the Federal Reserve\u2019s rails, arguing that firms operating under trust charters\u2014including Ripple\u2014will not be granted direct access to the Fed\u2019s payment system unless they become true depository institutions. \u201cStablecoin issuers are not legally depository institutions,\u201d she said. \u201cTo be […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-47767","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/47767","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=47767"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/47767\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=47767"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=47767"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=47767"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}