RLUSD Backed by DCO, DCM, FCM, and Broker-Dealer Licenses

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RLUSD Backed by DCO, DCM, FCM, and Broker-Dealer Licenses

• Hidden Road and Bitnomial combination provides RLUSD full regulatory coverage for rollout.
• Ripple seeks a national bank charter and a Fed Master account for RLUSD reserves.
• Cross-margin trading makes RLUSD unique if execution matches the license setup.

CoinFund President Christopher Perkins has shared how Ripples Hidden Road acquisition creates a complete licensed framework for RLUSD stablecoin operations. His analysis identifies the combination of Hidden Road and Bitnomial as delivering immediate utility and distribution capabilities through assembled regulatory licenses.

The licensing structure includes Derivatives Clearing Organization (DCO), Designated Contract Market (DCM), Futures Commission Merchant (FCM), and Broker-Dealer authorizations. Perkins emphasizes that execution will determine the success of this regulatory foundation rather than the licensing framework itself.

John E Deaton agreed with Perkins‘ assessment. He also described the Hidden Road acquisition as the best example of traditional finance and cryptocurrency coming together. Deaton’s comments followed Paul Barrons announcement that RLUSD would be accepted as collateral for all Hidden Road services.

Cross-Margin Trading Creates Advantages For RLUSD

The RLUSD stablecoin enables cross-margin trading between virtual assets and traditional markets, providing continuous availability. This functionality allows traders to use RLUSD as collateral across various asset classes without time restrictions that typically limit traditional financial markets.

Ripple has requested a national bank charter from the Office of the Comptroller of the Currency, seeking state and federal regulation under the existing approval of the New York Department of Financial Services. The company has also introduced Federal Reserve Master account access requests through Standard Custody. This direct connection with the Fed would allow Ripple to maintain RLUSD reserves in direct central bank custody.

Ripple CEO Compares Banking Scene With Operation Chokepoint

Garlinghouse compares the current banking collaboration with the previous Operation Chokepoint 2.0 restrictions, noting an increased willingness from financial institutions to collaborate with cryptocurrency firms. The Fed Master account access would eliminate intermediary banks from reserve management processes.

The regulatory solution also addresses stablecoin market issues related to reserve transparency and security. Federal Reserve custody directly eliminates counterparty risks associated with commercial bank deposit arrangements utilized by other stablecoin issuances.

Perkins focus on execution means that technical deployment and market penetration will determine whether the licenses in place translate into competitive power. The licensing format provides regulatory compliance, but it requires operational excellence to capture market share.

The congressional movement toward regulating cryptocurrencies is a positive context for Ripples banking use cases. More transparent regulatory direction reduces risk for the company and potential banking partners considering cryptocurrency business relationships.