Leading banking trade groups have requested that the U.S. banking regulator delay decisions on federal bank charters for crypto firms, such as Circle and Ripple.

A coalition of major banking and credit union associations, led by the American Bankers Association, has formally requested that the Office of the Comptroller of the Currency pause its evaluation of national bank license applications submitted by crypto-native firms, including Circle and Ripple.

In a letter sent Thursday, the groups argued that approving such applications could mark a “significant departure” from current federal policy. It cited insufficient public transparency and legal ambiguities around crypto companies’ proposed operations.

Banks Call for Delay in Crypto Charter Decisions

The joint letter, co-signed by multiple financial trade bodies, emphasizes that applications submitted by digital asset firms lack essential details. This absence of information hinders proper public scrutiny.

The groups expressed particular concern over whether these crypto applicants genuinely qualify for national trust bank status. This designation is typically reserved for entities engaged in fiduciary services.

“There are serious legal and policy uncertainties about whether the applicants’ business plans align with fiduciary standards traditionally upheld by national trust banks,” the letter noted.

The organizations highlighted that services like crypto custody, central to Circle and Ripple’s offerings, do not constitute fiduciary activities. Granting such firms federal charters without a public comment period, they argue, would bypass decades of regulatory norms.

Implications for Traditional Banking

If granted, these charters would enable crypto companies to operate nationwide under a single regulatory framework. This would eliminate the requirement for state-by-state money transmission licenses.

Critics fear this could erode existing safeguards. They also worry it might open the door for non-traditional financial firms to offer services such as payments and custody with fewer capital constraints.

“This change could pose material risks to the U.S. financial system,” the letter warned.

Custodia Bank founder Caitlin Long weighed in on the controversy via X (formerly Twitter). She called the banking groups’ pushback “an interesting reaction.”

Caitlin suggested that if trust charters offer lower regulatory hurdles, traditional banks may consider converting to similar models. This shift could help them reduce compliance costs.

Crypto Sector’s Regulatory Strategy Evolves

The debate comes amid growing interest among crypto-focused firms in securing formal banking licenses. Fidelity, Ripple, and Circle are among several crypto asset companies seeking federal charters to enhance payment speed, expand market access, and simplify compliance.

Logan Payne, a legal expert in blockchain regulation, noted that recent federal legislation, such as the GENIUS Act, which created a stablecoin-specific license, may unintentionally prompt firms to pursue broader banking licenses to maintain operational flexibility.

“Most stablecoin issuers conduct business that goes beyond the new license’s limited scope,” he explained. Traditional banks are primarily concerned about rising competition in the financial sector. 

“Credit unions and banks rarely agree on anything,” said Alexander Grieve, head of government affairs at crypto VC firm Paradigm. “But they seem united in pushing back against crypto entering their space.”

Dom Kwok, co-founder of EasyA, has explained why he believes retail investors, particularly first-time crypto buyers, will favor XRP over other assets.

He describes the investment case for XRP as “deceptively simple,” which, in his view, is precisely why it could become the go-to asset for retail investors entering crypto in 2025. According to Kwok, XRP’s current price and market position give it a significant edge in an environment where retail investors are increasingly priced out of top-tier coins.

Retail Investors Priced Out of Bitcoin and Ethereum

With Bitcoin trading near $120,000 and Ethereum hovering above $3,500, many retail investors, especially newcomers, are turning their attention to lower-priced alternatives. Kwok highlights XRP, which recently reached $3.60, as a more accessible entry point that still offers large-cap credibility.

In particular, Kwok noted that retail investors are priced out of Bitcoin and Ethereum, making XRP the next logical low-cost entry among the top-ranked cryptocurrencies.

Indeed, despite being the third-largest crypto by market capitalization, XRP trades at a fraction of the price of Bitcoin or Ethereum. This combination of high visibility and affordability makes XRP a psychologically attractive option for first-time investors, according to Kwok.

He argues that this dynamic is “the most appealing” setup for any retail buyer entering the space, especially those unfamiliar with market cap mechanics but drawn to lower unit prices.

Simplicity May Be XRP’s Strongest Advantage

Kwok further describes his thesis as “deceptively simple” as it follows behavioral patterns observed throughout previous crypto cycles. In past bull markets, assets with lower token prices have often attracted significant retail inflows, purely due to perceived affordability, regardless of fundamentals.

Key examples include Shiba Inu and Dogecoin during the last bull run. Shiba Inu, in particular, drew massive retail interest when it traded as low as $0.00000000001. This allowed buyers to acquire billions of tokens with just a few dollars.

However, while assets like SHIB and DOGE are still largely meme coins, XRP has strong underlying fundamentals. Its utility continues to fuel opinions from analysts who believe XRP could be the “next Bitcoin.”

Analyst Amonyx recently even went as far as to claim that XRP will create more millionaires than Bitcoin.

Despite XRP being as old as Bitcoin, many in the XRP community believe that the token is still in its early stages and could deliver life-changing gains similar to Bitcoin’s historic rise. However, many critics have challenged this view as overly optimistic.

Ultimately, XRP’s straightforward appeal, being significantly cheaper than Bitcoin, could become its greatest strength.

Retail Investors Dominate the XRP Holder Spectrum

This trend is already clearly playing out when analyzing the XRP investor landscape. According to the XRP Rich List, out of the 6.696 million wallets holding XRP, approximately 5.7 million belong to retail investors. Specifically, these wallets each hold less than 1,000 XRP.

In fact, 2.9 million wallets hold between 0 and 20 XRP. Another 2.52 million wallets hold between 20 and 500 XRP tokens.

These figures highlight how the XRP holder base is overwhelmingly composed of smaller, retail investors rather than large institutional players. This distribution underlines the asset’s accessibility and appeal to everyday investors seeking lower entry points in the crypto market.

A famous market commentator advises investors not to fret about buying XRP late and to resist the urge to sell too early, as the token’s best days lie ahead.

XRP surged tremendously earlier this week, hitting a multi-year high of $3.65 on July 18. The latest rally was fueled by several factors, including the U.S. House passing three crypto bills and rumors about the imminent resolution of the multi-year legal tussle. 

Despite its slight correction earlier, XRP still sits comfortably above the $3 price territory in the hours leading up to press time. However, XRP’s latest rally has elicited mixed reactions within its community. Some community figures like Six8Jay believe the recent surge makes it difficult for retail investors to amass sizable amounts of XRP. 

It’s Not Too Late to Buy XRP 

However, famous XRP commentator JackTheRippler shared a different opinion in a recent X post. Despite XRP’s recent gains, JackTheRippler stated that it is never too late to acquire the token. 

This implies that, despite the massive price surge of XRP, the leading cryptocurrency still has considerable potential for further gains. 

In JackTheRippler’s view, investors buying XRP today – even above the $3 price mark – can still reap significant gains, as the asset is poised for a further rally in the future. 

It is expected that the price of XRP will skyrocket if the SEC approves the launch of all 11 spot-based ETFs exclusively linked to the token. These products could further enhance investors’ confidence in XRP, potentially driving institutional demand and higher prices. 

Always Too Early to Sell XRP 

Meanwhile, the expert asserted that it is always too early to sell XRP. This reasoning is tied to investors’ expectations of further gains for the token. It warns against locking in profits too early and eventually missing out on future price gains. 

Recall that famous American businessman Dave Portnoy took to X to express regrets over missing out on 60% gains that would have seen him lock in profits to the tune of over $1 million. 

Portnoy confessed that he sold XRP two weeks ago, following a recommendation from someone who had initially advised him to purchase the token. Shortly after offloading his XRP stash, the coin embarked on a bullish run, pushing its price to $3.65. 

JackTheRippler’s post is a bullish way of saying that even though XRP has rallied massively, its best days still lie ahead. It reminds investors, particularly retail users, not to see XRP as “too expensive” and to resist the urge to sell too soon after a price spike. 

At press time, XRP was changing hands at $3.47, up 23.93% over the past week and 59.24% in the past month.