Brad Garlinghouse, CEO of Ripple Labs, denounced Wall Street banking lobbyists who sought to resist the move of his company and other crypto companies into the banking sector and into the Federal Reserve’s so-called master accounts.
The crypto industry “should be held to the same standards” for anti-money laundering protections and other safeguards against illicit financing as traditional financial firms, Garlinghouse said Wednesday at DC Fintech Week, agreeing with traditional bankers on this point. But the industry – as a result – “should have the same access to infrastructure as a Fed main account.”
“You can’t say one and then fight the other,” Garlinghouse said of demands that crypto be held to similar regulatory standards. “It’s hypocritical, and I think we should all call them out for their anti-competitive behavior in this regard.”
Fed master accounts would allow crypto companies to more easily integrate into the US financial system and directly access central bank systems – a benefit at the heart of the traditional banking system. But they faced difficulty convincing the Fed to grant such access, or even to explain how it could be achieved.
Ripple recently applied for a master account through its subsidiary Standard Custody & Trust Co. — a New York trust — at the same time the prominent crypto company was also seeking a federal banking charter from the Office of the Comptroller of the Currency in July.
Garlinghouse’s company, which has also recently looked into the area of stablecoin issuers, said banks were finally taking them more seriously after years of difficulty in which resistance from U.S. regulators made financial firms reluctant to engage.
“I had meetings yesterday in New York, where banks that wouldn’t have talked to us three years ago are now leaning in and asking, how could we collaborate around this topic?” he said, confirming that these conversations involved Ripple’s stablecoin effort, known as RLUSD.
He said granting master accounts to crypto companies such as Ripple and Circle would contribute to more stability, regulatory oversight and risk mitigation.
“It’s been a bit disappointing to see some traditional banks start to lobby against such things,” Garlinghouse said.
