Brad Garlinghouse, the CEO of Ripple Labs, called out the Wall Street banking lobbyists who have sought to resist the movement of his company and other crypto firms into the banking sector and into the Federal Reserve’s so-called master accounts.
The crypto sector “should be held to the same standard” on money-laundering protections and other illicit-finance safeguards as traditional financial businesses, Garlinghouse said at DC Fintech Week on Wednesday, agreeing with traditional bankers on that point. But the industry — as a result — “should have the same access to infrastructure, like a Fed master account.”
“You can’t say one and then combat the other,” Garlinghouse said of the demands that crypto be held to similar regulatory standards. “It’s hypocritical, and I think we all should call them out for being anti-competitive in that regard.”
Fed master accounts would allow crypto firms more seamless integration into the U.S. financial system and direct access to the central bank’s systems — a benefit at the core of traditional banking. But they’ve run into challenges in getting the Fed to grant such access, or even to explain how it could be obtained.
Ripple recently applied for a master account through its Standard Custody & Trust Co. affiliate — a New York trust — at the same time that the prominent crypto firm also sought a federal banking charter from the Office of the Comptroller of the Currency in July.
Garlinghouse’s company, which has also recently delved into the field of stablecoin issuers, said banks are finally taking them more seriously after years of difficulty in which the resistance from U.S. regulators made the financial firms reluctant to engage.
“I had meetings yesterday in New York City, where banks that would not have talked to us three years ago are now leaning in and saying, how could we partner around this?” he said, confirming that those conversations involved Ripple’s stablecoin effort, known as RLUSD.
He said granting crypto firms such as Ripple and Circle master accounts will contribute to more stability, regulatory oversight and risk mitigation.
“It’s been a little disappointing to see some of the traditional banks start to lobby against things like that,” Garlinghouse said.