Ripple Won’t Get Fed Master Account, Says Caitlin Long
Caitlin Long, the CEO of Wyoming-chartered Custodia Bank, delivered a stark evaluation of crypto’s path to the Federal Reserve’s rails, arguing that companies working below belief charters—together with Ripple—is not going to be granted direct entry to the Fed’s fee system except they develop into true depository establishments.
“Stablecoin issuers usually are not legally depository establishments,” she said. “To be capable of use Fedwire and ACH, the Fed has taken the place that it’s important to be a depository establishment… A belief firm by regulation is prohibited from accepting a US greenback deposit.” She added that whereas some belief firms have traditionally had restricted master-account preparations, it was “not for shifting cash within the fee system,” and the important thing prize—“the par assure”—belongs to banks alone. “You’ve received to legally be a depository establishment,” Long mentioned, concluding, “I firmly do imagine… the Fed shouldn’t be going to alter that.”
Long’s view arrives as Ripple pushes deeper into bank-grade infrastructure. Ripple closed its acquisition of Standard Custody & Trust Company in June 2024, positioning the New York-chartered belief firm on the middle of its stablecoin stack, and has continued to broaden its regulated footprint since then.
In early July 2025, Ripple applied for a US national bank charter and is pursuing a Federal Reserve grasp account—strikes that may, if permitted, put Ripple USD (RLUSD) reserves and settlement nearer to the Fed’s stability sheet and its fee providers. Long’s message to that technique is unambiguous: belief standing is an “middleman cease.” “There have been a number of now who’ve utilized for Fed grasp accounts,” she mentioned, however entry to Fedwire/ACH “is the excellence,” and “the stablecoin market, I firmly imagine, will go totally to the banks.
Can Ripple Get A Fed Masters Account?
The Fed’s authorized and coverage framework backs up the excellence Long describes. In August 2022, the Board finalized its Account Access Guidelines, which formalized a three-tier overview system and made clear that Reserve Banks consider requests for entry to “grasp accounts and providers” towards safety-and-soundness, authorized eligibility, and systemic-risk standards. The framework topics non-insured, novel charters to probably the most stringent overview.
Separately, the Federal Reserve defines a grasp account as “the file of economic rights and obligations” between an account holder and its Administrative Reserve Bank—exactly the ledger relationship that allows par settlement on Fed rails.
Courts have since affirmed broad Fed discretion to disclaim master-account requests even for legally eligible establishments, a precedent set in 2024 rulings that rejected arguments the Fed should grant entry upon request. That judicial backdrop is central to Long’s declare that coverage gained’t bend for belief firms: “I’ve had very in depth conversations with the precise determination makers,” she mentioned, and the road drawn round deposit-taking banks “shouldn’t be going to alter.”
Naming names clarifies the place crypto stands in the present day. The Federal Reserve’s public Master Account and Services Database—up to date most lately with knowledge present as of May 31, 2025—lists new “entry requests” and their standing, providing an official window into who’s asking to affix the fee system immediately. A Congressional Research Service report, citing that database, notes that Kraken Financial and Protego Trust have pending functions, whereas Bankwyse, Commercium Financial (a Wyoming SPDI) and Paxos withdrew theirs; Custodia’s request was denied.
After that, Standard Custody & Trust (Ripple-owned) and WisdomTree Digital Trust have entered the crypto-adjacent entry requests, underscoring the sector’s shift towards bank-grade plumbing whilst eligibility questions stay for belief firms.
Long, for her half, emphasised the authorized dividing line these lists reveal: “All these belief firms, together with OCC belief firms, [are] not eligible to get entry to the fee system for shifting US greenback deposits… Getting entry to Fedwire and ACH on the Fed, you’ve received to legally be a depository establishment.”
Her argument activates first rules quite than coverage temper. “What is a depository establishment? It is a monetary establishment that’s legally licensed to simply accept a US greenback deposit,” Long defined. Because belief firms are “prohibited from accepting a US greenback deposit,” the Fed’s fee system stays a bank-only lane. The consequence, she mentioned, is structural: “These belief firms… are middleman stops. That’s nice… [they] give firms the power to do enterprise nationwide” with out fifty separate money-transmitter licenses. “But… not for shifting cash within the fee system.”
In Long’s telling, stablecoin-issuance will finally consolidate “totally” inside banks—a few of which can be crypto-founded however will however be banks—as a result of solely banks can faucet the Fed’s par-clearing privilege at scale. For Ripple, the trail ahead subsequently seems binary. The trust-company structure round Ripple USD can assist custody and fiduciary capabilities; it can not, in Long’s studying and the Fed’s rule set, unlock direct Fedwire/ACH entry by itself.
That explains Ripple’s pivot towards a nationwide financial institution constitution and a master-account utility—steps that, even when they clear eligibility, should nonetheless cross the Fed’s risk-based scrutiny that tripped different candidates. In the meantime, Long’s backside line hangs over each trust-charter technique in crypto: “The worth of shifting cash within the fee system? It’s the par assure.” And that, she insists, “gained’t” be obtainable to belief firms—Ripple included—except they develop into banks.
At press time, XRP traded at $2.98.