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Prominent crypto advocate and attorney John Deaton is once again in the spotlight—this time challenging the American Bankers Association (ABA) over its recent opposition to Ripple and Circle’s attempts to secure federal bank licenses. Deaton, well known in the XRP community for his vocal support of fair crypto regulation, criticized the ABA’s move as a protectionist measure designed to keep innovation out of the traditional banking space.
The ABA and five other major financial organizations, including America’s Credit Unions and the National Bankers Association, recently submitted a formal request to the U.S. Office of the Comptroller of the Currency (OCC). Their appeal urged regulators to delay or deny trust charter approvals for digital asset companies, including Ripple and Circle, until a more public and detailed review process is established.
Deaton’s rebuttal was direct and personal. In a social media post, he told regulators to “ignore obstructionist lobbying,” pointing to what he views as deliberate efforts by legacy banking interests to limit competition. According to him, these tactics are meant to keep traditional players in control while sidelining innovators like Ripple and Circle who are trying to modernize the financial system.
Ripple and Circle Push Forward Despite Pushback
Ripple and Circle are among the few digital asset firms that have actively pursued federal trust charters as a way to operate within the legal banking framework. Ripple’s license application is tied closely to its plan to integrate stablecoin issuance and cross-border payment services into regulated banking. Similarly, Circle—known for its stablecoin USDC—has applied for a national trust bank charter to strengthen compliance and regulatory oversight.
These moves are not random. They align with the GENIUS Act, passed in July 2025, which requires stablecoin issuers to operate under federal oversight. The law mandates that such firms become regulated entities—either as banks, credit unions, or specially supervised non-banks under OCC guidance. By seeking licenses, Ripple and Circle are aiming to meet this compliance requirement head-on while expanding their services in the U.S. financial system.
Banking Groups Raise Legal and Risk-Based Objections
The ABA’s primary argument against granting these licenses is grounded in legal tradition. Under Section 92a of the U.S. Code, the ABA argues that national trust charters should only go to firms engaged in fiduciary activities—meaning they must act in a trust-based capacity on behalf of clients. Ripple and Circle, the ABA claims, do not meet this criterion because their business models revolve around crypto custody and payment networks, not traditional fiduciary services.
The ABA and its partners fear that approving these applications could create a regulatory loophole. Their letter warns of a “copycat effect,” suggesting that if Ripple and Circle gain approval, many more crypto firms could follow suit, seeking the privileges of a federal banking charter without taking on equivalent responsibilities. This could, they claim, undermine systemic financial stability and lead to unintended regulatory gaps.
They also objected to the OCC’s past flexibility in interpreting what constitutes fiduciary activity. Interpretive Letter 1179, now withdrawn, had given the OCC room to approve applications on a case-by-case basis. The ABA wants a hardline return to the old standard: no fiduciary duties, no charter.
Critics Call Out Protectionism, Support Innovation
Deaton is not alone in pushing back. Industry experts like Vincent Van Code have also criticized the ABA’s stance. Van Code described the move as “anti-competitive,” stating that the banking lobby is trying to protect its dominance by keeping newer, more agile financial players out of the market. He argued that companies like Ripple and Circle represent the future of finance by cutting out excess bureaucracy and leveraging blockchain technology for more efficient services.
To Deaton and other crypto advocates, the ABA’s letter is a signal that the traditional financial system is not ready to embrace the shift toward digital-first institutions. He framed the issue as more than just a technical debate—it’s a question of whether the financial system will evolve to meet the demands of the 21st century or cling to outdated structures that serve only a few.
“The century is over,” one user wrote in support of Deaton. “It’s time for next-gen finance to replace the cabal.”
What’s at Stake for Ripple and Circle
For Ripple, a banking license could help its XRP-based payment network become more integrated with traditional finance, particularly in the stablecoin sector. It could also help the company rebuild after years of legal battles with U.S. regulators. For Circle, obtaining a national trust charter would solidify USDC’s position as a reliable, regulated stablecoin, giving it an edge in both retail and institutional markets.
While the OCC has yet to make a decision, the pressure from both sides is building. On one hand, there’s growing demand for updated financial infrastructure that reflects today’s digital realities. On the other, legacy institutions are pushing hard to maintain control over who gets access to the financial system.
Final Thoughts
The battle over Ripple and Circle’s banking license applications is more than just a bureaucratic hurdle. It’s a test of whether the U.S. regulatory environment can accommodate innovation without compromising its legal and financial safeguards. As crypto moves closer to the mainstream, this debate will likely shape the next phase of the industry’s evolution—and determine who gets to lead it.
