Crypto World
What is atomic settlement? Payment-versus-Payment and the and of settlement risk
Atomic settlement means both sides of a deal are complete at the same instant or neither does, removing the centuries-old danger that one party pays and the other fails to deliver. This guide explains payment-versus-payment, why blockchains make it natural, and how banks are now testing it for cross-border trades.
Summary
- Atomic settlement means both sides of a transaction complete at the exact same moment or neither does, removing the risk that one party pays and the other fails to deliver.
- It targets settlement risk, the danger that has haunted finance for decades, most famously when a bank’s collapse left counterparties paid on one leg but not the other.
- Payment-versus-payment (PvP) applies this to currency trades and delivery-versus-payment (DvP) to securities, ensuring the two legs are linked and simultaneous.
- Blockchains and smart contracts make atomic settlement natural, because a single transaction can be programmed to either execute both legs together or fail entirely.
- The shift promises to compress settlement from days toward instant, and bank-backed projects are now testing it for cross-border foreign exchange.
Atomic settlement is a way of completing a transaction so that both sides happen at the same instant or neither happens at all, with no possibility that one party fulfills its obligation while the other fails to fulfill theirs. The word “atomic” captures the essential property: the transaction is indivisible, an all-or-nothing event that cannot be split into a completed half and an uncompleted half. This may sound like an obscure technicality, but it addresses one of the oldest and most dangerous problems in finance, the risk that arises in the gap between agreeing to a trade and actually settling it, during which one party can pay or deliver while the other defaults, leaving the first party out of pocket.
Atomic settlement closes that gap entirely by binding the two sides of a transaction together so they succeed or fail as a single unit. Blockchains, as it happens, are unusually well suited to delivering this property, which is why atomic settlement has become a central promise of tokenized finance.
This guide explains what atomic settlement is, the settlement risk it eliminates, how it applies to payments and securities, why blockchains make it natural, and how banks are now testing it in the real world.
The reason this matters is that settlement risk, though invisible to most people, is a genuine systemic danger that has caused real crises, and the financial industry has spent decades and enormous resources trying to manage it. Atomic settlement offers something the traditional system has never quite achieved: the complete elimination of that risk, not its mitigation but its removal, by making it structurally impossible for one leg of a trade to settle without the other.
Combined with the ability to compress settlement times from days to near-instant, the implications for capital efficiency and financial stability are significant. This guide covers the meaning of atomicity, the nature of settlement risk and the famous failure that named it, the payment-versus-payment and delivery-versus-payment models, a concrete worked example, why blockchains make atomic settlement natural, the move from multi-day to instant settlement, the real-world bank projects now testing it, and the genuine hurdles that remain.
What atomic settlement means
Begin with the core property, because everything else follows from it. A transaction is atomic when it is indivisible: it either completes in full, with both sides fulfilling their obligations simultaneously, or it does not happen at all, with neither side committed. There is no in-between state in which one party has paid and the other has not.
The term is borrowed from computing, where an atomic operation is one that cannot be interrupted partway through, and it carries the same meaning in finance: an atomic settlement cannot be left half-done. If anything would prevent both legs from completing together, the entire transaction reverts, returning both parties to where they started as if nothing had happened.
This all-or-nothing quality is what makes atomic settlement powerful. In an ordinary transaction split across time, there is always a window during which one party has performed and is waiting for the other to perform, and in that window the first party is exposed to the risk that the second fails.
Atomic settlement abolishes that window by making the two performances a single, simultaneous, inseparable event. Neither party can find itself having given value without receiving it, because the giving and receiving are bound together and happen at once or not at all.
The significance is that a risk which traditional finance has always had to manage, monitor, and price, the risk lurking in the gap between the legs of a trade, simply ceases to exist under atomic settlement, because the gap itself is gone. Understanding that the entire benefit flows from this one structural property, indivisibility, is the key to understanding why atomic settlement matters.
The problem it solves: settlement risk
To appreciate atomic settlement, you have to understand the danger it removes, which is called settlement risk, and there is no better illustration than the event that gave one form of it its name. In 1974, a German bank named Herstatt was shut down by regulators in the middle of a business day. Earlier that day, counterparties had paid the bank in German marks as their side of foreign-exchange trades, expecting to receive United States dollars in return once the New York business day began. But the bank was closed before it made those dollar payments, so the counterparties had handed over their marks and received nothing back. They had performed their leg of the trade and were left exposed when the bank failed to perform its leg. This specific danger, where one party pays and the other fails before reciprocating, became known as Herstatt risk, a permanent reminder of what settlement risk can do.
Settlement risk, in general, is the risk that arises in any transaction where the two sides do not settle simultaneously. Whenever there is a gap between when one party performs and when the other does, the party that goes first is exposed to the possibility that the counterparty defaults, becomes insolvent, or simply fails to deliver in that interval. This is sometimes called principal risk, because the party can lose the entire principal amount it advanced, not merely the profit on the trade.
Across the global financial system, where trillions of dollars in currencies, securities, and other assets change hands daily, settlement risk is a pervasive and serious concern, and managing it requires extensive infrastructure, collateral, monitoring, and trust. Atomic settlement is so significant precisely because it does not merely reduce this risk through better management; it eliminates it structurally, by ensuring the two legs settle together so that neither party is ever exposed to the other’s potential failure. The problem that closed Herstatt and has haunted finance ever since simply cannot occur when settlement is atomic.
Payment-versus-Payment and Delivery-versus-Payment
The principle of atomic settlement shows up in finance under two main labels, depending on what is being exchanged, and knowing the difference clarifies the concept. When the exchange is one currency for another, as in a foreign-exchange trade, the atomic version is called payment-versus-payment, often abbreviated PvP.
Under PvP, the payment in one currency and the payment in the other currency are linked so that both happen simultaneously or neither does, ensuring that no party can pay in one currency without receiving the other. This is the direct answer to Herstatt risk: under true PvP, the situation that destroyed Herstatt’s counterparties, paying marks and not receiving dollars, becomes impossible, because the two payments are bound together.
When the exchange is an asset for a payment, as when securities are bought or sold, the atomic version is called delivery-versus-payment, abbreviated DvP. Under DvP, the delivery of the security and the payment for it are linked so that the asset changes hands at the same instant as the money, ensuring that no party delivers a security without receiving payment, and no party pays without receiving the security.
Both PvP and DvP are expressions of the same atomic principle applied to different kinds of trades, and both aim to eliminate the settlement risk that lives in the gap between the legs. The traditional financial system has built elaborate infrastructure to approximate these protections, such as specialized settlement institutions that hold both legs and release them together, but these systems are complex, do not cover every currency or market, and still leave gaps. Atomic settlement on a blockchain offers a way to achieve PvP and DvP more directly and more universally, which is a large part of why the technology has drawn such intense institutional interest.
A worked example: an FX trade with and without atomicity
To make settlement risk and its atomic solution concrete, walk through a single foreign-exchange trade both ways. Suppose a bank in Europe agrees to sell ten million euros to a bank in Asia in exchange for the equivalent in dollars. Under the traditional, non-atomic process, the two payments may not happen at the same moment, because the banks operate in different time zones and through different payment systems.
The European bank might send its euros during its business day, expecting the dollars to arrive later when the other party’s systems process the payment. In the interval between sending the euros and receiving the dollars, the European bank is exposed: if the Asian bank fails, defaults, or is shut down in that window, the European bank has paid ten million euros and may receive nothing, losing the entire principal. This is exactly the Herstatt scenario, and it is a real risk that institutions must monitor and manage on every such trade.
Now run the same trade with atomic settlement. The euro payment and the dollar payment are bound together into a single, indivisible transaction, structured so that both transfers execute at the same instant or neither executes at all. If for any reason the dollar leg cannot complete, the euro leg does not complete either, and both banks remain exactly where they started, with no exposure and no loss.
The European bank can never find itself having sent euros without receiving dollars, because the protocol makes that outcome structurally impossible. The risk window that existed in the traditional version is gone, not managed or reduced but eliminated, because the two legs are no longer separated in time. That is the difference atomicity makes: it converts a trade with an unavoidable risk window into a trade with no risk window at all, which is why the financial industry regards atomic settlement as a genuine advance rather than an incremental improvement.
Why blockchains make atomic settlement natural
Atomic settlement is not new as a concept, but blockchains make it dramatically easier to achieve, and understanding why reveals the deep fit between the technology and the problem. A blockchain transaction is, by its nature, atomic at the level of the ledger: it either executes completely and is recorded, or it fails and changes nothing. Smart contracts, the programmable agreements that run on many blockchains, extend this property to complex, multi-step transactions.
A smart contract can be written so that it performs two transfers, say, moving one asset from party A to party B and another asset from party B to party A, as a single operation that either completes both transfers together or reverts entirely, leaving both parties untouched. This is atomic settlement expressed directly in code, with the all-or-nothing guarantee enforced by the blockchain itself rather than by an external institution.
This is a profound fit, because the property that finance has always struggled to guarantee, that two legs of a trade settle together or not at all, is something a blockchain provides almost for free, as a basic feature of how it works. The earliest crypto version of this idea was the atomic swap, a way for two parties to exchange different cryptocurrencies such that the swap either completes for both or fails for both, with no possibility of one party absconding with the other’s coins.
The same principle now underpins the tokenization of traditional assets: if currencies and securities are represented as tokens on a blockchain, then trades between them can be settled atomically by smart contracts, achieving true PvP and DvP without the elaborate intermediary infrastructure the traditional system requires. The blockchain becomes the neutral venue where both legs settle simultaneously and trustlessly. This is why atomic settlement is so central to the institutional interest in tokenization: the technology delivers, as a native capability, the settlement guarantee that traditional finance has spent decades and fortunes trying to approximate.
From multi-day to instant settlement
Closely tied to atomic settlement is the compression of settlement time, and the two together explain much of the institutional excitement. In traditional markets, settlement often does not happen immediately after a trade is agreed; instead, it occurs after a delay, commonly a couple of business days for many securities, a convention referred to by labels like T plus two, meaning trade date plus two days.
This delay exists for historical and operational reasons, because the traditional system needs time to coordinate the many parties, records, and transfers involved in settling a trade. But the delay is costly: during the gap between trade and settlement, capital is tied up, positions carry risk, and the settlement exposure discussed above persists for longer. Shortening the cycle has been a long-running goal of market reform, with markets gradually moving from longer cycles to shorter ones over the years.
Atomic settlement on a blockchain points toward the logical endpoint of this trend: instant settlement, sometimes called T plus zero, where the trade settles the moment it is executed. Because a smart contract can bind and complete both legs simultaneously, there is no operational reason for a multi-day delay; the settlement can happen at the instant of the trade.
This collapses the settlement window from days to seconds, which has large benefits. Capital is freed immediately rather than tied up for days, settlement risk persists for moments instead of days, and the entire system becomes more efficient and less exposed. The combination of atomicity, which removes the risk in the gap between legs, and instant settlement, which removes the gap in time, is what makes blockchain-based settlement so attractive to institutions.
Together, they promise a financial system where trades settle instantly and with no settlement risk, a meaningful improvement over a status quo built around multi-day cycles and the risks they carry.
The real-world push: bank projects and tokenization
This is not merely theoretical, because banks and market infrastructures are actively testing atomic settlement, which signals that the technology is moving from concept toward production. A notable recent example is a bank-backed initiative bringing together a large group of international banks to study faster cross-border foreign-exchange settlement using atomic, payment-versus-payment swaps of compliant stablecoins, aiming to replace the multi-day settlement that currency trades often still require with simultaneous, same-instant settlement.
The design deliberately works with existing bank standards and messaging infrastructure instead of asking banks to abandon their systems, layering atomic settlement onto the rails they already use. The scale of such efforts, involving banks representing trillions of dollars in assets, shows that the institutional world takes atomic settlement seriously as a practical goal, not just a research curiosity.
The broader context is the tokenization of real-world assets, which is the larger movement that atomic settlement enables. As currencies, government bonds, equities, and funds are increasingly represented as tokens on blockchains, the trades between them can be settled atomically, achieving the simultaneous, risk-free settlement that has long been the ideal.
Major financial institutions and market infrastructures have been running pilots and building platforms for tokenized assets precisely because the settlement properties are so attractive, and the tokenized-asset sector has grown substantially as a result. The convergence of tokenized assets and atomic settlement is, in many ways, the heart of the institutional crypto thesis: not speculative tokens, but the use of blockchain technology to settle real financial transactions instantly and without settlement risk.
The bank projects testing it today are the early, concrete steps toward that future, and their progress is a useful signal of how quickly atomic settlement is moving from promise to practice.
Risks and open questions
For all its promise, atomic settlement carries real hurdles and risks that an informed reader should weigh instead of accepting the idealized vision. The first is a liquidity requirement: atomic settlement demands that both legs of a trade be available to settle at the same instant, which means the necessary assets or funds must actually be present on the settlement venue simultaneously. In a world where value is fragmented across many blockchains and traditional systems, ensuring that both legs are present and ready at the same moment is a genuine operational challenge, and a trade cannot settle atomically if one side’s liquidity is not there when needed.
Other open questions are significant. Legal finality is one: for atomic settlement to be trusted by institutions, the law must recognize a blockchain settlement as final and irreversible in the same way it recognizes traditional settlement, and the legal frameworks for this are still developing in many jurisdictions.
Fragmentation is another, because if assets are tokenized across many incompatible blockchains, achieving atomic settlement between them requires interoperability that does not always exist, and bridging between chains can reintroduce the very risks atomic settlement was meant to remove.
There are also operational demands, since instant, around-the-clock settlement requires institutions to manage liquidity continuously instead of within business-day cycles, a real change to how treasury operations work. And the technology itself must be secure, because a flaw in a settlement smart contract could undermine the guarantees the whole system relies on.
None of these hurdles is necessarily fatal, and the active bank projects suggest they are being worked through, but they are real, and atomic settlement should be understood as a powerful approach still maturing instead of a finished solution. As with any emerging financial technology, the gap between a successful pilot and universal adoption can be wide, and the risks in that gap are worth respecting.
Frequently Asked Questions
What is atomic settlement in simple terms?
Atomic settlement is a way of completing a transaction so that both sides happen at the same instant or neither happens at all. The word “atomic” means indivisible: the transaction cannot be left half-done, with one party having paid and the other not. If anything would stop both legs from completing together, the whole transaction reverts and both parties end up where they started. This removes the risk that one party performs while the other fails, which is the core danger in any trade where the two sides do not settle simultaneously.
What is settlement risk?
Settlement risk is the danger that arises in the gap between agreeing to a trade and actually settling it, during which one party can pay or deliver while the other defaults, leaving the first party exposed. It is sometimes called principal risk, because the exposed party can lose the entire amount it advanced. The classic example is Herstatt risk, named after a German bank shut down in 1974 after its counterparties had paid it in marks but before it paid them dollars, leaving them with nothing. Atomic settlement eliminates this risk by binding the two legs together.
What is the difference between PvP and DvP?
Both are forms of atomic settlement applied to different trades.
Payment-versus-payment, or PvP, applies to currency exchanges, linking the payment in one currency to the payment in the other so both happen together or neither does, which directly prevents Herstatt-style losses.
Delivery-versus-payment, or DvP, applies to securities, linking the delivery of the asset to the payment for it so the security and the money change hands at the same instant. Both express the same atomic principle, ensuring no party gives value without simultaneously receiving what they were promised.
Why are blockchains good at atomic settlement?
Because a blockchain transaction is naturally atomic: it either executes completely or fails and changes nothing. Smart contracts extend this to complex trades, allowing two transfers to be bound into a single operation that either completes both together or reverts entirely. This gives, as a native feature, the all-or-nothing settlement guarantee that traditional finance has spent decades trying to approximate with elaborate intermediary infrastructure. When currencies and securities are tokenized on a blockchain, trades between them can settle atomically through smart contracts, achieving true PvP and DvP directly.
What is the difference between T+2 and T+0 settlement?
T plus two means a trade settles two business days after it is agreed, a common convention in traditional markets that exists because the legacy system needs time to coordinate the many parties and records involved. During that delay, capital is tied up and settlement risk persists. T plus zero, or instant settlement, means the trade settles the moment it is executed, which atomic settlement on a blockchain makes possible because a smart contract can complete both legs simultaneously. Moving from T plus two to T plus zero frees capital immediately and shrinks the risk window from days to seconds.
Is atomic settlement actually being used?
It is being actively tested and piloted instead of universally deployed. Bank-backed initiatives have brought together large groups of international banks to study faster cross-border foreign-exchange settlement using atomic, payment-versus-payment swaps, working with existing bank standards instead of replacing them. The broader tokenization of real-world assets, which has grown substantially, relies on atomic settlement as a core benefit, and major institutions have run pilots and built platforms around it. So atomic settlement is moving from concept toward practice, though real hurdles around liquidity, legal finality, interoperability, and operations remain to be worked through.
This article is educational information, not financial or investment advice. The technology and the projects described are still developing, and details reflect reporting available as of June 26, 2026, which can change quickly. Verify current information from primary sources before relying on anything described here.
Brad Garlinghouse has criticized Michael Saylor’s Bitcoin acquisition strategy, arguing that Strategy’s reliance on preferred stock financing has failed to create lasting value as its securities continue to weaken.
Summary
- Brad Garlinghouse criticized Strategy’s Bitcoin funding model, arguing long-term value should come from utility rather than financial engineering.
- Growing scrutiny of Strategy includes a shareholder investigation, insider share sales, and CryptoQuant’s call to preserve cash.
- Anchorage Digital said investors remain defensive, but options markets are not signaling expectations of a company-specific crisis.
According to comments made during a CNBC interview on Friday, Ripple CEO Brad Garlinghouse criticized Michael Saylor’s approach to financing Bitcoin purchases through Strategy’s capital markets program, saying long-term value in crypto should come from real-world utility rather than financial engineering.
Questioning whether the model can continue rewarding shareholders over time, Garlinghouse argued that issuing securities to fund additional Bitcoin purchases does not create sustainable value. He added that Strategy’s focus on financial structuring has had negative consequences for the digital asset market.
“Financial engineering does not drive long-term value … long-term value of any digital asset is going to be driven by utility.”
Although he challenged Strategy’s funding model, Garlinghouse maintained that he remains bullish on Bitcoin itself. His comments came as Bitcoin briefly traded below $60,000 on Friday, extending pressure across companies closely tied to the cryptocurrency.
Strategy’s preferred stock has come under pressure
Garlinghouse pointed to Strategy’s STRC preferred shares as evidence that investors are becoming more cautious about the company’s financing structure. He noted that the preferred stock has fallen roughly 25% below its $100 face value, describing the decline as a sign that investors are questioning the sustainability of the approach.
Strategy has spent roughly the past year raising capital through preferred securities, including STRC, to finance additional Bitcoin purchases. The instrument also carries an 11.5% cumulative annual dividend obligation, leaving the company with continuing dividend commitments alongside its expanding Bitcoin treasury.
At the same time, scrutiny has widened beyond Garlinghouse’s criticism. Earlier this week, on-chain analytics firm CryptoQuant recommended that Strategy pause further Bitcoin purchases and instead strengthen its cash reserves as market conditions remain difficult.
Additional pressure has emerged from legal developments. As crypto.news reported previously, Rosen Law Firm has opened an investigation into whether Strategy made materially inaccurate business disclosures to investors. According to the firm, it is evaluating potential securities claims and considering a possible class action lawsuit on behalf of shareholders who suffered losses.
Investor scrutiny has continued despite mixed market signals
Selling by company insiders has added another layer to investor concerns. SEC filings show Strategy director Jarrod Patten exercised options to acquire 1,500 Class A shares on June 23 before selling the entire position the same day at $106.08 per share, generating an estimated pre-tax gain of about $131,766.
The latest transaction extends a months-long selling streak. Regulatory filings indicate Patten has sold 55,750 Strategy shares over the past three months for roughly $9 million in proceeds, with the sales taking place as investors continue debating the company’s reliance on repeated share issuance and leveraged Bitcoin accumulation.
Even so, derivatives markets are not signaling expectations of an immediate company-specific crisis. According to new research from Anchorage Digital, traders continue paying elevated premiums for downside protection across Bitcoin, BlackRock’s iShares Bitcoin Trust and Strategy shares, but options pricing remains well below levels seen during previous periods of severe stress.
Anchorage Digital’s head of research, David Lawant, wrote that while defensive positioning has risen into the upper range of historical readings, Strategy’s options market has not reached the conditions normally associated with forced deleveraging or fears of a breakdown in the company’s business model.
A conditional national trust bank charter, a pending Federal Reserve master account, and a string of acquisitions in brokerage, payments, and treasury. Ripple is assembling a full regulated-finance stack. The benefits flow first to its stablecoin and the company itself. What is left for XRP is the question.
Summary
- Ripple has assembled a full regulated-finance stack: a conditional national trust bank charter, a pending Federal Reserve master account bid, and acquisitions in prime brokerage, payments, and treasury services.
- The charter and master account primarily benefit RLUSD, Ripple’s stablecoin, whose reserves would sit under federal and state oversight, not XRP directly.
- A national trust bank cannot take ordinary deposits or carry federal deposit insurance, so the real prize is direct access to Federal Reserve payment rails and custody of its own stablecoin reserves.
- For XRP, the benefit is indirect: a more legitimate, bank-grade Ripple strengthens the whole ecosystem and XRP’s role as a bridge asset, but it creates no direct token-demand mechanism.
- This is the same pattern that defined XRP through 2026, in which Ripple’s wins flow first to the company and RLUSD, with the token benefiting slowly, if at all.
Ripple is turning itself into a bank, or something very close to one, and it is doing it methodically.
Over the past year the company won conditional federal approval to operate a national trust bank, applied for a Federal Reserve master account that would give it direct access to the central bank’s payment systems, and bought its way into prime brokerage, payments, and corporate treasury services through a series of acquisitions.
Add the dollar stablecoin it already issues, the 70-plus regulatory licenses it holds around the world, and a fresh European license that lets it passport services across 30 countries, and the picture is unmistakable.
A company once known mainly for a cross-border payments network and a controversial token is assembling the full apparatus of a regulated financial institution.
For XRP holders, who have watched the token grind sideways near a dollar through a year of Ripple triumphs, the natural question is what all of this means for them.
The honest answer is more complicated, and more sobering, than the headlines suggest, because almost every piece of Ripple’s banking build benefits the company and its stablecoin first, and the token only indirectly.
This piece works through Ripple’s transformation into a regulated financial institution and what it actually delivers for XRP. It covers the banking stack Ripple is assembling, what a national trust bank can and cannot do, the real prize of a Federal Reserve master account, why the charter is mostly a stablecoin story, what genuinely accrues to XRP, the bull case within the bank build, and what holders should watch.
The goal is to separate the real significance of Ripple becoming a bank, which is considerable for the company, from the wishful assumption that everything good for Ripple is automatically good for the token, which 2026 has repeatedly shown to be false.
A payments company is turning into a financial institution
Take the full measure of what Ripple has built, because the strategy only becomes clear when you see the pieces together.
The foundation is a conditional charter to operate a national trust bank, granted by the Office of the Comptroller of the Currency, the federal regulator that supervises national banks. The OCC conditionally approved Ripple National Trust Bank alongside other crypto firms in a broader wave of national trust bank approvals.
That federal approval matters because it moves Ripple deeper into the regulated banking perimeter without turning it into an ordinary retail bank.
A subsequent rule expanded what such trust banks are allowed to do, turning what would have been a narrow custody license into something with real operational scope, including digital-asset custody, stablecoin reserve management, and certain payment services.
On top of the charter, a Ripple subsidiary applied for a Federal Reserve master account, the account that would connect Ripple directly to the central bank’s payment rails.
And around that regulatory core, Ripple has been buying capabilities: a prime brokerage, a payments business, and a corporate treasury-services firm, each acquisition adding a piece of the institutional-finance stack.
Layer in the rest and the ambition is obvious. Ripple issues a dollar-pegged stablecoin that has grown past $1 billion in market value.
It holds dozens of regulatory licenses across jurisdictions, and it recently secured preliminary European authorization that lets it offer regulated services across the entire European Economic Area.
That is where Ripple’s European license fits into the larger build. The company is not only chasing U.S. banking access; it is trying to make its regulated-finance stack portable across major markets.
Taken individually, any one of these is a notable corporate step. Taken together, they describe a single, coherent strategy: to become the institutional infrastructure layer for crypto-native finance.
Ripple wants to be a regulated entity that banks and corporations can trust to custody assets, manage stablecoin reserves, settle payments, and connect to both the traditional financial system and the blockchain world.
Ripple is not dabbling in banking. It is building a bank-grade financial institution deliberately, piece by piece.
The question for a token holder is where, in all of this carefully assembled machinery, XRP actually fits.
What a national trust bank is, and what it is not
Before assessing what the charter means for XRP, it is worth being precise about what a national trust bank actually is, because the word “bank” carries connotations the charter does not deliver.
A national trust bank is not a retail bank. It cannot take ordinary deposits, cannot offer checking or savings accounts, and does not carry federal deposit insurance, the protection that backs ordinary bank deposits.
What it can do is custody assets, provide fiduciary and trust services, manage reserves, and, under the expanded rule, handle digital-asset custody and certain payment-related functions.
Headlines that say “Ripple becomes a bank” are gesturing at something real, but they compress away an important distinction.
That distinction matters for understanding the charter’s purpose. Ripple’s trust bank exists primarily to serve Ripple’s stablecoin business.
Its core planned function is to custody and manage the reserve assets that back the stablecoin, which today are held through a separate trust entity, and to provide custody to institutional clients.
By bringing reserve management in-house under a federal charter, Ripple gains tighter control, removes reliance on third-party custodians, and obtains a regulatory standing that few stablecoin issuers can match: oversight at both the federal level, through the national chartering regulator, and the state level, through New York’s financial regulator.
That dual supervision is a genuine selling point to institutions weighing whether to trust Ripple’s rails.
This is also why the fight over trust charters matters. Senator Elizabeth Warren and banking groups have challenged the idea that crypto firms with OCC trust charters should be treated like bank-grade institutions, arguing that they could act like crypto banks without the same restrictions.
The crypto industry has pushed back. The Digital Chamber called on the OCC to uphold crypto trust bank charters for firms including Coinbase, Ripple, Circle, and BitGo, arguing that the charters are part of bringing digital assets into regulated finance rather than keeping them outside it.
But notice what the trust bank does not do. It does not custody XRP for the benefit of XRP holders, does not create any obligation to buy or hold the token, and does not make XRP a bank deposit or a regulated bank instrument.
It is, at its heart, infrastructure for the stablecoin, which is the recurring theme of Ripple’s entire banking build.
The real prize: a Federal Reserve master account
The most consequential piece of Ripple’s banking strategy is the one furthest from being secured: a Federal Reserve master account.
A master account is the account a financial institution holds directly with the central bank, and it is the gateway to the core of the financial system.
It allows direct settlement through the central bank’s payment networks, the same rails the largest banks use, and direct access to base money rather than balances held at a commercial bank.
For a stablecoin issuer, the prize is enormous. With a master account, Ripple could hold the reserves backing its stablecoin directly at the central bank, the safest possible place, eliminating the counterparty risk of relying on private banks and giving institutions far greater confidence in the stablecoin’s solvency and redemption safety.
That is why custody and reserve safety matters so much in this story. Stablecoins are only as trusted as the assets backing them, the institutions holding those assets, and the transparency around redemption.
The catch is that no crypto-native firm has ever received full access of this kind on ordinary terms, and the bar is extraordinarily high.
The central bank has historically been reluctant to extend master accounts to non-traditional institutions. Uninsured trust banks face the most stringent levels of review, and previous attempts by crypto-adjacent firms to win access have often failed or taken years.
Ripple’s subsidiary has applied, and the application remains pending, with no public timeline and no clear signal of when or whether the central bank will act.
Approval would be genuinely transformative. It would mark a deeper integration between a crypto-native company and the core U.S. financial system, and it would dramatically strengthen the institutional credibility of RLUSD.
But it is far from assured. Even in the optimistic case, the direct beneficiary is again the stablecoin and the company’s settlement capabilities, not the token.
A master account would let Ripple hold stablecoin reserves at the central bank and settle through its rails. It would not, by itself, create demand for XRP.
The prize is real, and the prize is mostly about everything except the token.
Why this is mostly a stablecoin story
Step back and a clear pattern emerges from every piece of Ripple’s banking build: it is, overwhelmingly, a stablecoin story.
The trust charter exists primarily to custody and manage stablecoin reserves. The master account, if granted, would primarily benefit the stablecoin by letting its reserves sit at the central bank.
The European license primarily expands where Ripple can offer regulated payment and stablecoin services. The acquisitions in brokerage, payments, and treasury primarily build out an institutional settlement and services business in which the stablecoin is the natural cash leg.
Ripple’s dollar stablecoin has grown past $1 billion, expanded across multiple blockchains, and won approvals in multiple jurisdictions. The banking apparatus is being constructed largely to support and legitimize it.
That is why the RLUSD the bank serves is the center of the story. A stablecoin is useful to institutions precisely because it is designed to hold a steady dollar value while moving across crypto rails.
Ripple’s own reserve-transparency page also shows why this matters. The company is trying to make RLUSD look less like an experimental crypto product and more like a regulated dollar instrument with transparent backing, regular attestations, and bank-grade custody.
This is the same dynamic that defined XRP through 2026, when Ripple’s marquee bank deals and settlement milestones ran through its stablecoin and ledger while the token captured little beyond a negligible network fee.
As previously reported, this is why Ripple wins bypass the token. Ripple can deepen its institutional footprint while XRP still waits for direct, measurable token demand.
The banking build is that dynamic taken to its logical conclusion. Ripple is constructing a regulated financial institution whose central purpose is to make its stablecoin the most trusted, most institutionally credible dollar token in the market, and to build a settlement and custody business around it.
XRP is part of the broader ecosystem, but it is not the thing the bank is for.
A holder hoping that the charter, the master account bid, and the acquisitions would translate into direct demand for the token is, once again, watching the wrong variable.
The value of all this machinery flows first to Ripple the company and to the stablecoin it is built to serve, exactly as Ripple’s own communications have acknowledged in noting that the banking progress is unlikely to move the token’s price directly or immediately.
So what do XRP holders actually get?
If the bank build is mostly about the stablecoin, the fair question is whether XRP holders get anything at all.
The honest answer is yes, but indirectly and slowly. The benefit to XRP runs through legitimacy and ecosystem strength rather than any direct mechanism.
As Ripple becomes a regulated, bank-grade financial institution, the entire ecosystem it anchors gains credibility in the eyes of the banks and corporations Ripple wants as customers.
A more trusted Ripple makes every part of its stack, including the ledger on which XRP lives and the role XRP can play, more palatable to institutional users.
The argument, which Ripple and many holders make, is that demand for one asset in an ecosystem can lift others in the same stack, and that a Ripple wired into the core of the financial system is a Ripple better positioned to drive real-world use of XRP as a bridge asset over time.
This indirect benefit is not nothing, and it would be a mistake to dismiss it. XRP’s most plausible long-term role is as a bridge asset that moves value between currencies in settlement.
A Ripple with a federal charter, a master account, and a credible institutional settlement business is a Ripple with more opportunities to route that kind of settlement in ways that touch the token.
But the benefit is conditional, gradual, and unguaranteed, three qualities that make it very different from the direct, immediate boost holders often hope for.
XRP does not become a bank deposit, a stablecoin, or a regulated instrument through any of this. It remains a separate, volatile asset whose demand depends on whether Ripple’s growing institutional infrastructure eventually channels real settlement volume through it.
The competing path is obvious: the same settlement volume could instead keep flowing through RLUSD, which is better suited to settlement precisely because it does not move in price.
The banking build improves the odds that Ripple can win regulated institutional business someday. It does not make that business flow through XRP now, and it does not create token demand on its own.
The bull case within the bank build
In fairness to the optimistic view, there is a coherent bull case for XRP buried inside Ripple’s banking transformation, and it deserves a clear statement.
The strongest version goes like this: Ripple is methodically removing every reason an institution might hesitate to build on its rails.
The charter answers the custody and reserve-management question. The master account, if granted, answers the reserve-safety question at the highest possible level.
The acquisitions answer the brokerage, payments, and treasury questions. The licenses answer the regulatory question across jurisdictions.
As those barriers fall one by one, Ripple becomes a place where serious institutions can conduct serious volume. In a world where Ripple is running large-scale regulated settlement, the case for using XRP as the neutral bridge asset between currencies strengthens, because the infrastructure to do it at scale finally exists and is trusted.
Pair that with the token’s other tailwinds, including the regulatory clarity from its resolved legal status, the spot exchange-traded funds gathering assets, and the prospect of federal legislation codifying its commodity classification, and the bull case becomes clearer.
That is where the legislation that could codify XRP fits in. If the CLARITY Act turns XRP’s commodity treatment into durable federal law, it could make institutions more comfortable using the token where it has a genuine settlement role.
In that version of the future, XRP sits inside a maturing, increasingly bank-grade ecosystem at exactly the moment that ecosystem becomes capable of institutional-scale activity.
If even a fraction of the settlement flowing through a fully built-out Ripple touches XRP as a bridge, the demand could be meaningful, and it would arrive on top of a token that has already cleared its regulatory hurdles.
This is a real argument, and it is why the banking build is truly good news for the long-term XRP thesis even though it is not a direct catalyst.
The caveat, as always, is the word “if.” The bull case depends on Ripple choosing and managing to route settlement through the token rather than through the stablecoin, and the entire pattern of 2026 suggests the stablecoin keeps winning that role.
The infrastructure being built is real. Whether XRP is wired into it is the open question.
What XRP holders should watch
For a holder trying to judge whether Ripple’s banking transformation will ever translate into token demand, the analysis points to a few specific signals worth tracking, none of which is another charter or acquisition headline.
The first is the Federal Reserve master account decision.
If granted, it would be a landmark for Ripple and the stablecoin, and it would mark the company’s deepest integration into the financial system. Over time, that expands the surface area where XRP could be used.
If denied, a key piece of the institutional thesis stalls.
Either way, it is the most consequential pending item, and its outcome shapes everything downstream.
The second and more important signal is whether XRP actually appears in the settlement flows of Ripple’s bank-grade business, as opposed to the stablecoin doing all the work.
This is the variable that decides the entire question. If Ripple’s institutional settlement increasingly routes through XRP as a bridge asset, generating real, recurring token demand, then the banking build will finally have reached the token.
If, as has been the pattern, the stablecoin carries the settlement while XRP captures only a fee, then the bank is a Ripple and stablecoin story with XRP riding the halo of legitimacy but not the flows.
The third signal is the broader regulatory picture, particularly whether federal legislation codifies XRP’s status, which would compound the legitimacy the banking build provides.
The honest synthesis is that Ripple becoming a bank is a major, genuine achievement that strengthens the company, the stablecoin, and the long-term credibility of the whole ecosystem.
For XRP specifically, it improves the odds without delivering the goods.
The token’s payoff depends on a future choice, to run regulated settlement through XRP, that Ripple has not yet shown it will make.
Until it does, the bank is being built for everything except the token, and the token, as it has all year, waits.
Frequently asked questions
Is Ripple actually becoming a bank?
Sort of, but with important caveats. Ripple won conditional federal approval to operate a national trust bank and applied for a Federal Reserve master account, and it has acquired prime brokerage, payments, and treasury businesses. But a national trust bank is not a retail bank: it cannot take ordinary deposits, offer checking or savings accounts, or carry federal deposit insurance. It is a specialized institution for custody, fiduciary services, and reserve management. So Ripple is building a bank-grade regulated financial institution, but one focused on custody and stablecoin reserves instead of traditional deposit-taking banking.
What is the Federal Reserve master account and why does it matter?
A master account is an account held directly with the central bank, giving direct access to its payment rails and to base money, the same access the largest banks have. For Ripple, it would let the company hold its stablecoin’s reserves directly at the central bank, the safest possible location, eliminating reliance on private banks and boosting institutional confidence in the stablecoin. No crypto-native firm has ever been granted full access of this kind on ordinary terms, the review is stringent, and Ripple’s application is pending with no timeline. Approval would be transformative for the company and stablecoin, though not a direct catalyst for XRP.
Does Ripple’s banking push help XRP?
Indirectly and gradually, not directly. The charter and master account primarily benefit Ripple’s stablecoin, whose reserves they would custody and secure. XRP does not become a deposit, a stablecoin, or a regulated instrument. The benefit to XRP runs through legitimacy: a bank-grade Ripple strengthens the whole ecosystem and improves the odds that XRP is eventually used as a bridge asset in regulated settlement. But that is conditional and slow, not the direct demand boost holders often hope for, and Ripple itself has acknowledged the banking progress is unlikely to move the token’s price immediately.
Why does the stablecoin benefit more than XRP?
Because the entire banking build is designed around the stablecoin. The trust charter exists mainly to custody and manage stablecoin reserves. The master account, if granted, would let those reserves sit at the central bank. The acquisitions build a settlement business in which the stablecoin is the natural cash leg. A stablecoin is suited to settlement precisely because it holds a steady value, while XRP’s volatility makes it less suitable for that role. So Ripple’s regulated infrastructure naturally channels value to the stablecoin, with XRP benefiting only as part of the broader, more credible ecosystem.
What is the bull case for XRP in all this?
The bull case is that Ripple is methodically removing every reason an institution might hesitate to use its rails, through the charter, the master account bid, the acquisitions, and the licenses. As those barriers fall, Ripple becomes capable of large-scale regulated settlement, and the case for using XRP as a neutral bridge asset between currencies strengthens because the trusted infrastructure to do it finally exists. Combined with XRP’s regulatory clarity, its ETFs, and possible federal legislation, the bull case is that XRP sits inside a maturing, bank-grade ecosystem just as that ecosystem becomes capable of institutional-scale activity. The caveat is whether settlement actually routes through XRP instead of the stablecoin.
What should XRP holders watch next?
Three things. First, the Federal Reserve master account decision, which would mark Ripple’s deepest integration into the financial system and expand where XRP could be used, or stall a key part of the thesis if denied. Second, and most important, whether XRP actually appears in the settlement flows of Ripple’s institutional business, generating real token demand, as opposed to the stablecoin doing all the work. Third, the broader regulatory picture, especially whether federal legislation codifies XRP’s commodity status. The token’s payoff depends on Ripple choosing to route regulated settlement through XRP, a choice it has not yet shown it will make.
This article is information, not investment advice. Cryptocurrency is volatile, and regulatory approvals, corporate plans, and figures reflect reporting available as of June 26, 2026, which can change quickly. Verify current data from primary sources before making any decision.
UC Berkeley professor and Oasis Labs founder Dawn Song has joined Meta Superintelligence Labs as vice president of AI research.
Summary
- Dawn Song joins Meta, bringing Oasis privacy experience to frontier AI safety and security work.
- Virtue AI members are joining Meta as MSL builds safety tools for agentic AI systems.
- ROSE remains near record lows, showing Song’s AI move has not revived Oasis token demand.
She said she will help lead Meta’s AI safety and AI security efforts. Song announced the move in a post on X. She said several members of the Virtue AI team will also join Meta. Axios also reported that Virtue AI co-founders Bo Li and Sanmi Koyejo are among the hires.
Song said her work at Meta will focus on frontier AI models and agentic AI systems. She wrote that AI must be “secure, trustworthy, and beneficial” if it is to reach its full use.
The move gives Meta more senior talent in AI security. It also brings a well-known blockchain privacy researcher into one of the world’s largest AI labs.
Virtue AI team moves to MSL
Virtue AI was founded in 2024 to build tools for trustworthy AI. Song said the team worked on AI security, agent security, benchmarks and open platforms before the Meta move.
According to Axios, Meta is hiring several Virtue AI leaders and team members. The report said the group worked on automated red teaming, runtime guardrails and AI governance.
Meta’s interest comes as AI labs put more attention on agent safety. AI agents can take actions, use tools and handle tasks across software systems. That makes security more important because errors or misuse can spread across real products.
As previously reported, Meta has been building a superintelligence AI team after its large Scale AI deal. The company wants to improve its AI models and ship them across Facebook, Instagram, WhatsApp and other products.
Oasis background adds crypto angle
Song is also known in crypto as the founder of Oasis Labs. The company raised $45m in 2018 to build privacy-first cloud computing on blockchain. Its backers included a16zcrypto, Accel and Binance Labs.
The Oasis project later became tied to the Oasis Network and the ROSE token. The network focuses on confidential computing, data privacy and privacy-preserving applications.
In a previous article, crypto.news discussed Oasis Protocol’s verifiable AI agents for crypto trading. The project used trusted execution environments to keep strategies private while giving users proof of how agents behave.
Previously, crypto.news explored Oasis-based AI and data services through Pontus-X, a platform built around privacy and data control. Song’s Meta role connects that same privacy and security theme to a much larger AI platform.
ROSE remains near record lows
The hiring news has not changed ROSE’s weak market setup. Oasis traded near $0.0059 on June 26, close to its intraday low. That is about 99% below its all-time high near $0.596.
ROSE has also struggled with the broader crypto market selloff. Its market value remains far below peak-cycle levels, even as AI and privacy remain active themes in the sector.
The move is still notable for the Oasis community because Song helped shape the project’s early research identity. Her work linked blockchain, privacy and security before AI safety became a major mainstream topic.
For Meta, the hire adds academic and startup experience to its AI safety push. For crypto, it shows how privacy and security talent from blockchain continues to move into frontier AI.
Long-dormant Ethereum (ETH) wallets dating back nearly eight years have begun moving funds again, according to on-chain monitoring shared by multiple crypto analytics sources. The activity has reintroduced additional ETH supply into the visible flow, coinciding with Ether trading slightly above the $1,500 mark. While some of these addresses have taken profits, other large holders appear to be continuing accumulation, resulting in a mixed ledger picture.
At the same time, analysts say long-term whale profitability has deteriorated across major ETH holder cohorts. This matters for compliance and institutional risk assessment because persistent unrealized losses can influence large-holder behavior, custody-related transfers, and the pace at which liquidity is redeployed across venues—factors that institutions often track when managing exposure and counterparty risk.
Key takeaways
- On-chain trackers reported activation of ETH addresses last used in 2017, with one group of wallets moving a combined 37,602 ETH after years of dormancy.
- Separately, large investors appear to be rotating into ETH through swaps involving BTC, while others have continued withdrawals from major exchanges.
- Analysts state that unrealized profitability for major ETH whale cohorts has turned negative for the first time since 2019, based on reported unrealized profit ratios.
- Institutional custody-related movements were also noted, including transfers involving Coinbase Prime, without confirmation of a market sale.
Eight-year-old wallets reactivate, bringing long-dated supply into motion
According to Lookonchain, four Ethereum wallets that collectively received 37,602 ETH nearly eight years ago—at an average price of about $830—became active after a prolonged period of dormancy. The same set of wallets reportedly held through multiple market cycles, including the 2021 and 2025 bull markets, when unrealized gains reached levels described as exceeding $150 million.
Lookonchain further reported that these wallets sold 33,623 ETH during Thursday’s activity at an estimated price near $1,560, with the realized profit now described as approximately $27.4 million. For compliance teams and market-structure monitoring, reactivation of long-dormant addresses can be a relevant signal: it may reflect liquidity management, tax or rebalancing actions, or simply opportunistic execution after extended inactivity—each with different implications for market integrity checks and risk controls.
Whales show mixed behavior: rotation into ETH alongside selective profit-taking
Beyond the reactivated wallet group, other large transactions were reported as continuing capital rotation into Ether. Lookonchain stated that one whale swapped 464 BTC, valued at about $27.6 million, for 17,750 ETH. Such cross-asset rotation can be meaningful in institutional workflows because it may affect spot liquidity dynamics and the timing of ETH supply relative to broader crypto market flows.
In a separate report, investor Chun Wang was described as acquiring 9,937 ETH and 147 wrapped Bitcoin. Lookonchain also cited recent behavior in which Wang withdrew nearly 87,000 ETH from Binance over the prior month, at an average purchase price reported as $1,749. Exchange withdrawals by large holders are often monitored for operational and counterparty risk reasons—particularly where trading activity, custody arrangements, or liquidity sourcing may change.
Institutional-related activity was also referenced. BlackRock was reported to have transferred 41,996 ETH and 4,577 BTC to Coinbase Prime. Movements to Prime are commonly associated with custody or operational management rather than an immediately confirmed spot sale. For regulated entities, the distinction matters: custody transfers can trigger reporting and monitoring workflows without implying directional market exposure.
Unrealized losses broaden across whale cohorts
Crypto analyst Darkfost highlighted that unrealized profit ratios for ETH whale cohorts—from 1,000 ETH up to more than 100,000 ETH—have turned negative. The analyst said this is the first time since 2019 that every major whale cohort is reported to be underwater on an unrealized basis.
While unrealized metrics are not guarantees of future behavior, they are frequently used by analysts as a proxy for risk posture and conviction. Darkfost added that when ETH prices test whale conviction historically, periods often align with long-term bottom zones. Even so, the current setup was framed as placing greater pressure on large holders in 2026, even as selective accumulation appears to persist.
For institutional compliance monitoring, this kind of broadening drawdown can be relevant when assessing the potential for forced selling, changes in collateralization behavior, or shifts in custody and transfer patterns—especially for firms with exposure to exchanges, OTC counterparties, or derivative counterparties whose operational decisions may be influenced by large-holder positioning.
ETH’s $1,500 area remains a focal point amid ongoing uncertainty
Separately from on-chain behavior, attention among market participants remains on Ether’s $1,500 level. The article sources cited that ETH fell to around $1,510 during Thursday’s sell-off, while not setting a new yearly low as Bitcoin moved to fresh 2026 lows.
Crypto trader Ardi characterized $1,500 as a key long-term support, arguing that daily closes below that region would undermine bullish assumptions formed since the 2022 bear market. Crypto investor Jelle similarly suggested that a sustained break could return ETH to a trading range last seen in early 2023, noting that the $1,500 zone has historically been defended during several major corrections since mid-2022.
Other participants pointed to the possibility of lower demand zones. Trader Cyclops identified a $1,070–$1,370 range as a potential accumulation area, describing it as a demand region established in early 2023. The same source noted that moving into that lower band would also mean ETH breaking below a multi-year ascending trendline—an outcome that could prolong uncertainty in market structure.
From a policy and risk perspective, the common theme is not price forecasting but the importance of clearly defined reference levels for institutional monitoring: support breaks can affect portfolio risk calculations, margin models, and liquidity planning. However, the unresolved question remains whether observed on-chain transfers reflect genuine distribution pressures or routine movements that do not necessarily translate into sustained sell-side flow.
Closing perspective
The reactivation of nearly eight-year-old ETH wallets, combined with reported negative unrealized profitability across major whale cohorts, underscores a market where long-dated holders are again participating in active liquidity. Watch for whether these movements translate into sustained net distribution or whether ongoing withdrawals and ETH-denominated swaps continue to offset the added supply. For compliance and institutional teams, tracking wallet reactivation, exchange withdrawal patterns, and custody-related transfers alongside regulatory monitoring frameworks remains a practical approach as crypto markets evolve.
Crypto users have reported difficulties withdrawing funds from the exchange AscendEX, renewing concerns about exchange liquidity and operational readiness during periods of customer demand. Blockchain investigator ZachXBT and multiple social-media accounts pointed to delays and apparent limitations in the exchange’s liquid reserves, framing the issue as a potential liquidity problem rather than an isolated technical glitch.
These allegations matter for institutional compliance and risk teams because withdrawal processing is a key stress indicator for trading venues. When withdrawals become stuck or support channels stop responding, regulators and auditors typically treat it as a potential sign of liquidity strain, inaccurate reserve management, or deficient contingency controls—issues that can quickly intersect with insolvency risk, consumer protection obligations, and AML/CTF expectations.
Key takeaways
- Multiple users reported delayed withdrawals from AscendEX, including at least one case where a USDT withdrawal remained in an “initiating” status for days.
- ZachXBT said AscendEX may have limited large-cap token reserves, citing purported low holdings of widely used assets such as ETH, USDT, and SOL.
- On-chain analytics referenced by Cointelegraph indicated AscendEX-tagged wallets were concentrated in smaller-cap tokens rather than major cryptocurrencies.
- The situation echoes post-FTX regulatory and industry emphasis on demonstrable liquidity and transparency, including proof-of-reserves approaches.
User complaints highlight potential withdrawal processing gaps
According to an X post by an account operating under the name Lorenzo Navarro Rodriguez, a 4,196 USDT withdrawal on AscendEX remained stuck in an “initiating” state since June 10. The same post alleged that repeated inquiries to customer support did not receive responses.
Following that initial report, at least five other users responded over subsequent days with similar claims about withdrawal delays. While social-media reporting does not, on its own, establish causality, repeated, independent user accounts can increase the likelihood that an operational or liquidity bottleneck is affecting customers—particularly when withdrawal requests do not progress and support fails to provide timely status updates.
From a compliance perspective, unresolved withdrawal delays can also complicate obligations related to customer asset safeguarding, dispute handling, and required communications to affected counterparties. If a venue cannot process withdrawals within expected service windows, risk teams generally consider whether internal controls for hot-wallet management, transaction monitoring, and escalation procedures are functioning as intended.
ZachXBT links the issue to liquidity concerns
ZachXBT said in a Telegram post on Friday that AscendEX lacked large-cap reserves for major assets, including ETH, USDT, and SOL, and suggested this may indicate “liquidity issues” on the platform. He urged the exchange to respond to reports of delayed withdrawal requests and to clarify why its hot wallets appeared to have low liquidity.
Hot wallets are central to withdrawal execution because they must hold sufficient balances to cover outgoing transactions without requiring time-consuming asset swaps or fund transfers from less liquid or less accessible accounts. If a platform’s operational liquidity is concentrated in illiquid holdings—especially small-cap tokens—withdrawals of major assets can become delayed, particularly if conversion routes are constrained by market depth, exchange limits, or internal custody flows.
However, unresolved details remain. Even when on-chain activity suggests reserve composition constraints, it does not automatically confirm whether the exchange can meet withdrawal demand through other mechanisms (for example, larger balances elsewhere under different wallet clusters, custodial arrangements, or internal transfer arrangements not visible to public labeling). As such, the legal and regulatory implications typically depend on verified asset custody, the completeness of reserve disclosure, and documented solvency and operational capacity.
On-chain data cited by Cointelegraph points to reserve concentration
Blockchain data on Arkham, reviewed by Cointelegraph on Friday, indicated that wallets tagged as AscendEX-held contained about $20.2 million in crypto. The same analysis described those Arkham-tagged wallets as being concentrated in smaller-cap assets, with comparatively limited holdings of major cryptocurrencies.
Cointelegraph reported that AscendEX-tagged wallets showed UNITE tokens as the largest holding at approximately $10 million. Other cited holdings included REUR at about $5.24 million, ASD at around $2.9 million, and roughly $600,000 in Reservoir rUSD stablecoins, among smaller positions.
Cointelegraph also reported that it had approached AscendEX for comment but did not receive a response before publication. The absence of an official explanation is consequential in both governance and compliance contexts. When liquidity concerns surface, institutional stakeholders typically expect timely disclosures covering withdrawal status, wallet and custody structure, and the operational steps being taken to clear pending requests—especially where customer communications appear inconsistent.
These issues are not occurring in a regulatory vacuum. Following the 2022 collapse of FTX, withdrawal behavior became a focal point for regulators and industry participants. In that case, customer withdrawal requests exposed a large shortfall, culminating in bankruptcy. The broader industry response included increased attention to reserve transparency and more intensive regulatory scrutiny of exchange solvency and custody practices.
Regulatory implications: liquidity, custody, and transparency expectations
Delays in customer withdrawals can trigger multiple regulatory and legal considerations across jurisdictions. While this article does not establish wrongdoing, it highlights a scenario regulators commonly scrutinize: whether an exchange holds sufficient liquid assets to meet customer redemption demands and whether custody arrangements and internal controls are capable of handling peak outflows.
In the European context, MiCA has increased the compliance and governance expectations for crypto-asset service providers, including requirements that can affect how firms manage customer assets, disclosures, and operational resilience. Even where MiCA applies differently depending on licensing status and activity type, the direction of travel is consistent: regulators are placing greater emphasis on risk controls and verifiable safeguards for customer funds.
In the United States, enforcement and regulatory focus from bodies such as the SEC and CFTC has historically centered on how crypto intermediaries structure operations, disclose risks, and manage custody and market integrity concerns. Separately, AML/KYC compliance obligations do not disappear during liquidity stress; in fact, heightened operational strain often increases the risk of compliance breakdowns, including failure to adequately screen counterparties, properly document investigations, or maintain auditable records of transactions during customer disputes.
Cross-border complexity also matters. Exchanges operating across multiple markets face different standards for reserve reporting, insolvency planning, and customer-protection requirements. Without verified and jurisdiction-appropriate disclosures, a venue may face challenges demonstrating compliance to regulators or to institutional counterparties—particularly banks and regulated financial firms evaluating counterparty risk exposure.
Finally, reserve claims and proof-of-reserves efforts, while helpful, can be incomplete if they do not reflect total customer entitlements, the accessibility of assets when withdrawals are requested, and the distinction between illiquid holdings and immediately usable liquidity. For institutional monitoring, the practical question is not only what assets are held, but how quickly and reliably they can be mobilized to honor withdrawal demands.
Closing perspective
For now, the core open issue is verification: whether AscendEX can process pending withdrawals at scale and whether its disclosed or accessible reserves align with customer redemption needs. Continued user reporting, any official exchange statements, and any regulator- or auditor-led assessments will be key to determining whether the incident reflects temporary operational constraints or a deeper liquidity and custody mismatch.
Galaxy Digital has lowered its estimated probability of the CLARITY Act becoming law in 2026 to 50%, citing a shrinking Senate calendar and the absence of visible legislative progress ahead of the August recess.
Summary
- Galaxy Digital has lowered its estimated odds of the CLARITY Act passing in 2026 to 50%, citing Senate scheduling delays rather than policy disagreements.
- Polymarket traders now assign only a 41% chance of the CLARITY Act becoming law this year as legislative momentum weakens.
- Galaxy said a July floor vote commitment and release of the final Senate bill could improve the legislation’s prospects.
According to a research note from Galaxy Digital, Head of Research Alex Thorn reduced the firm’s previous 60% estimate after concluding that time, rather than the contents of the bill, has become the biggest obstacle to passage.
Thorn wrote that the lack of public developments has become a signal in itself, arguing that negotiations have yet to produce the milestones normally expected before a floor vote.
While the Senate Banking and Agriculture Committees have been working on a combined version of the legislation, Galaxy noted that lawmakers have not released the merged text or announced a debate schedule. Thorn wrote that staff-level discussions remain constructive but cautioned that private negotiations should not be mistaken for legislative momentum without a public voting timetable.
Separately, data from Polymarket shows traders currently assign about a 41% chance that the CLARITY Act will be signed into law in 2026, indicating growing skepticism over the bill’s prospects.
Senate calendar has become the biggest hurdle
As the Senate remains adjourned until July 13, the available legislative window before the August recess has narrowed further. As previously reported by crypto.news, Representative Anna Paulina Luna said Senate Majority Leader John Thune secured unanimous consent for the adjournment, meaning no senator objected to the extended break.
Luna criticized the decision and said she would not vote to reopen the House floor until senators return to Washington. Her comments came as the CLARITY Act continues waiting for Senate floor time after advancing onto the chamber’s legislative calendar.
Galaxy argued that competition for Senate floor time has intensified following President Donald Trump’s decision to tie his support for a bipartisan housing bill to passage of the SAVE Act. According to Thorn, lawmakers must also address other priorities, including FISA legislation and the annual National Defense Authorization Act, leaving limited time for crypto market structure legislation.
Calling the legislative calendar the primary concern, Thorn wrote that the downgrade is tied to scheduling rather than disagreements over the bill itself. He added that the remaining runway before the August recess has been reduced to only a matter of weeks, making floor time the Senate’s scarcest resource.
Policy debates continue alongside procedural delays
Apart from scheduling pressures, several policy issues also remain unresolved. Galaxy noted that ethics provisions continue to divide lawmakers even after a conflict-of-interest amendment was removed during committee consideration. Thorn also pointed to ongoing requests from law enforcement organizations seeking revisions to developer protections contained in the Blockchain Regulatory Certainty Act.
Earlier this week, the U.S. Department of Justice rejected concerns raised by four national law enforcement organizations, stating that the CLARITY Act would not reduce prosecutors’ ability to investigate crimes involving digital assets. The organizations had argued in a June 23 letter that Section 604 and related exemptions could create regulatory gaps that criminals might exploit, while the Justice Department said the legislation would not weaken investigations into offenses including terrorism financing, drug trafficking, and human smuggling.
Meanwhile, Senator Cynthia Lummis has said the Senate expects to release the final CLARITY Act text around July 4 for public review before seeking floor consideration later in July. According to crypto.news, if the Senate amends the House-approved version, both chambers would still need to reconcile the legislation before sending it to the president.
Galaxy said several developments could improve the bill’s prospects, including publication of a unified Senate text, resolution of the remaining policy disputes, and, most importantly, a leadership commitment to schedule a July floor vote.
Thorn added that such an announcement within the next two weeks could lift the firm’s estimated odds back to 60% or higher, while continued silence into mid-July would likely lead to another downgrade.
A wave of crypto firms, from Ripple to Circle, have won national trust bank charters, and several are chasing a Federal Reserve master account. This guide explains what a crypto trust bank actually is, what a charter does and does not grant, and why the real prize sits at the central bank.
Summary
- A crypto trust bank is a chartered trust institution that custodies digital assets and manages stablecoin reserves, bringing crypto custody inside the regulated banking system without being a full retail bank.
- A national trust charter lets a crypto firm custody its own assets and reserves and obviate the patchwork of state money-transmitter licenses, but it cannot take ordinary deposits or carry federal deposit insurance.
- In 2025 and 2026, a wave of crypto firms, including Ripple, Circle, Paxos, Fidelity Digital Assets, and others, won conditional national trust charters.
- The bigger prize is a Federal Reserve master account, which would give direct access to the central bank’s payment rails and let a firm hold reserves at the Fed itself, something no crypto-native firm has yet achieved.
- Charters and master accounts primarily benefit stablecoins and custody businesses by deepening their regulatory standing, marking crypto’s convergence with traditional banking.
A crypto trust bank is a chartered financial institution, supervised like a bank, whose purpose is to custody assets and provide fiduciary services rather than to take deposits and make loans, and which a crypto firm uses to hold digital assets and manage stablecoin reserves inside the regulated banking system. That definition contains the key to understanding the whole subject: a trust bank is a real, regulated bank, but a specialized kind, built around safekeeping and trust services rather than the deposit-taking and lending that define ordinary retail banks.
In 2025 and 2026, a remarkable wave of crypto firms obtained or pursued these charters, transforming companies once seen as outside the financial system into federally supervised institutions, a shift that marks one of the clearest signs yet of crypto converging with traditional banking. This guide explains what a trust bank is, what a national trust charter actually grants a crypto firm and what it pointedly does not, why so many crypto companies suddenly wanted one, the even larger prize of a Federal Reserve master account, and what the whole development means for stablecoins, for the industry, and for users.
The reason this matters is that the relationship between crypto and the banking system has been one of the defining tensions of the industry’s history. For years, crypto firms depended on traditional banks to hold their customers’ money and connect them to the financial system, a dependence that became a serious vulnerability during periods of regulatory pressure and bank failures, when crypto companies found their accounts closed or their banking partners collapsing.
The move to obtain trust charters is, in large part, an effort to end that dependence by bringing crypto firms inside the regulated banking system on their own terms. This guide covers what a trust bank is, the powers and limits of a charter, the 2025-2026 wave of approvals, a worked example of how a charter changes a stablecoin issuer’s position, the central-bank master account that is the ultimate goal, what it all means for stablecoins, and the genuine limits and risks that the headlines often gloss over.
What a trust bank is
Start with the institution itself, because the word “bank” carries assumptions that a trust bank does not always meet. In traditional finance, a trust bank is a bank that specializes in custody and fiduciary services rather than in the deposit-taking and lending that most people associate with banking. Its core business is holding assets on behalf of clients, safeguarding them, and managing them in a fiduciary capacity, meaning with a legal duty to act in the client’s interest.
Trust banks have long existed to custody securities, manage estates and trusts, and provide safekeeping for institutions, and they are regulated as banks, but their activities are narrower and, in important ways, less risky than those of a full-service commercial bank, because they are not lending out customer money or running the maturity mismatches that make ordinary banking risky.
This specialization is exactly what makes the trust bank model attractive to crypto firms. A crypto company’s central regulated need is custody: safely holding digital assets and, for stablecoin issuers, holding and managing the reserve assets that back their tokens. A trust bank charter is purpose-built for precisely this kind of safekeeping and fiduciary activity, which is why crypto firms gravitated to it instead of to a full commercial banking charter that would saddle them with powers and obligations they neither need nor want.
By becoming a trust bank, a crypto firm gains the regulated standing and supervisory oversight of a banking institution while staying within the narrower scope of custody and trust services that match its actual business.
Understanding that a trust bank is a custody-and-fiduciary institution, not a deposit-and-lending one, is the foundation for understanding everything a crypto trust charter does and does not provide.
What a national trust charter grants, and what it does not
A national trust charter, granted in the United States by the federal regulator that oversees national banks, gives a crypto firm a specific and valuable set of capabilities, and it is important to be precise about both what it includes and what it excludes. On the positive side, the charter allows the firm to operate as a federally supervised trust bank, custodying digital assets and, under expanded rules, managing stablecoin reserves and providing certain payment-related services.
Crucially, it lets the firm custody its own assets and reserves directly, instead of depending on a third-party bank, and it can obviate the need for the patchwork of separate state money-transmitter licenses that crypto firms have historically had to collect state by state, replacing a fragmented compliance burden with a single federal charter. It also confers the legitimacy and oversight of a banking institution, which matters enormously to the institutional clients a crypto firm wants to serve.
The exclusions are just as important, and they are where headlines often mislead. A national trust charter does not make a crypto firm a full bank in the everyday sense. It does not permit the firm to take ordinary deposits, the way a retail bank accepts checking and savings accounts. It does not come with federal deposit insurance, the government protection that backs ordinary bank deposits up to a limit, because trust banks generally do not hold the kind of deposits that insurance covers.
And it does not authorize the firm to lend, to run the credit business at the heart of commercial banking. So when a crypto firm “becomes a bank” via a trust charter, it gains custody, reserve management, and regulated standing, but it does not gain the ability to take insured deposits or make loans. This distinction is not a quibble; it is central to understanding what these charters actually mean, because a customer who assumes a chartered crypto trust bank offers the same protections as an insured retail bank would be mistaken, and that misunderstanding could matter a great deal in a crisis.
Why crypto firms suddenly want them
The sudden rush of crypto firms toward trust charters in 2025 and 2026 was not coincidental, and understanding the motivations explains the strategic logic. The first and most fundamental driver is independence from third-party banks. For most of crypto’s history, firms relied on partner banks to hold customer funds, custody reserves, and connect to the financial system, and that dependence proved dangerous: during periods of regulatory pressure and amid a series of bank failures, crypto companies found their banking relationships severed or their partner banks collapsing, threatening their operations through no fault of their own. A trust charter lets a firm custody its own assets and reserves directly, removing that single point of failure and the strategic vulnerability it created.
The second driver is regulatory tailwind. A shift in the political and regulatory environment toward a more accommodating posture on crypto opened a path for these charters that had been effectively closed before, and the federal regulator approved a cluster of crypto firms in a coordinated wave, signaling a broader acceptance of crypto-native institutions in the banking system.
The third driver is the rise of stablecoin regulation: as comprehensive rules for stablecoins took shape, holding a trust charter aligned a firm with the likely requirements, particularly around the custody and management of reserves, positioning compliant issuers ahead of the curve. The fourth is simple competitive and reputational advantage: a federally chartered trust bank carries a legitimacy that a lightly regulated startup cannot match, and for firms courting banks, asset managers, and corporations as clients, that regulated standing is a powerful selling point.
Together, these drivers, independence, regulatory opening, stablecoin alignment, and legitimacy, explain why a long list of major crypto firms pursued charters at once, turning what had been a fringe idea into an industry-wide movement.
A worked example: a stablecoin issuer with and without a charter
To see why a charter matters in practice, compare a stablecoin issuer’s position before and after obtaining one, because the contrast makes the abstract benefits concrete.
Without a charter, a stablecoin issuer must rely on third-party banks to hold the reserve assets that back its tokens, the cash and short-term government securities that give the stablecoin its value. This dependence creates several vulnerabilities. The issuer is exposed to the health of its partner banks, so if one of them fails or freezes the account, the reserves and the stablecoin itself are jeopardized, a danger that became vividly real when a stablecoin temporarily lost its peg after a bank holding part of its reserves collapsed. The issuer must also navigate a patchwork of state-by-state money-transmitter licenses, a costly and fragmented compliance burden, and it lacks the regulated standing that would reassure cautious institutional users.
With a national trust charter, the same issuer’s position is transformed. It can custody its own reserve assets directly through its chartered trust bank, under federal supervision, removing the dependence on potentially fragile third-party banks. In some cases the firm gains oversight at both the federal and state level, a dual-supervision structure that few stablecoin issuers can match and that serves as a strong signal of credibility to institutions evaluating whether to trust the stablecoin.
The single federal charter can replace much of the state-by-state licensing burden, simplifying compliance. And the regulated standing of a trust bank reassures the banks, asset managers, and corporations the issuer wants as customers, lowering the barrier to adoption. The worked comparison shows the charter’s real value clearly: it converts a stablecoin issuer from a firm dependent on outside banks and a fragmented license patchwork into a federally supervised institution that controls its own reserves and carries banking-grade legitimacy. That transformation is precisely why stablecoin issuers were among the most eager pursuers of these charters.
The real prize: a Federal Reserve master account
As valuable as a trust charter is, it is a stepping stone to something larger, and the ultimate goal for the most ambitious crypto firms is a Federal Reserve master account. A master account is the account a financial institution holds directly with the central bank, and it represents the deepest possible integration into the financial system. It grants direct access to the central bank’s payment rails, the core networks through which money moves between institutions, and access to base money held at the central bank itself, instead of balances held at a commercial bank. For most of the financial system, this kind of direct central-bank access is reserved for traditional banks, and obtaining it is the difference between operating at the edge of the system and operating at its core.
For a crypto firm, particularly a stablecoin issuer, the appeal of a master account is profound. It would allow the firm to hold the reserves backing its stablecoin directly at the central bank, the safest possible place to keep them, eliminating the counterparty risk of relying on commercial banks and giving institutions unparalleled confidence in the stablecoin’s solvency and the safety of its redemptions. It would also allow direct settlement through the central bank’s payment systems, a powerful capability for a payments-focused firm.
The obstacle is that the bar is extraordinarily high, and no crypto-native firm has yet been granted a master account. The central bank has historically been cautious about extending this access to non-traditional institutions, uninsured trust banks face the most stringent review, and previous attempts by crypto-adjacent firms to win access have been denied. Several chartered crypto firms have applied and are waiting, with no guaranteed outcome and no clear timeline. The master account is the real prize precisely because it is so hard to win and so transformative if won, marking the moment a crypto-native firm would plug directly into the heart of the financial system.
What it means for stablecoins and the industry
Stepping back, the trust-charter wave is, more than anything, a stablecoin story, and seeing why clarifies the whole development. The firms most eager for charters were heavily those with stablecoin businesses, because the charter speaks directly to a stablecoin issuer’s central regulated needs: custodying and managing the reserve assets that back the token, doing so under credible supervision, and removing the dependence on third-party banks that has repeatedly threatened stablecoins in the past.
As comprehensive stablecoin regulation took shape, a trust charter became close to a prerequisite for operating a serious, institutionally trusted stablecoin in the United States, and the firms that obtained charters positioned their stablecoins as the most credible and best-supervised in the market. The dual oversight some of them gained, federal and state, became a competitive selling point, a way to signal to institutions that the stablecoin’s reserves are held to banking-grade standards.
The broader significance is the convergence of crypto and traditional banking. The trust-charter wave marks the moment when crypto firms stopped operating outside the regulated banking system and began entering it as supervised institutions, accepting the obligations of banking regulation in exchange for its legitimacy and stability. This is a profound shift from crypto’s early ethos of operating apart from, and often in opposition to, the traditional financial system. It signals a maturing industry in which the leading firms seek the same regulated standing as banks, and in which the line between a crypto company and a financial institution blurs. For the industry, this convergence brings legitimacy, stability, and access, the ability to custody assets safely, serve institutional clients, and integrate with the financial system.
It also brings the constraints of regulation, the compliance burdens, capital requirements, and supervision that come with a banking charter. The trust-charter wave is, in essence, crypto’s leading firms choosing to join the financial system instead of replacing it, which is one of the most consequential shifts in the industry’s trajectory.
Risks and limits to understand
For all the significance of the trust-charter movement, several risks and limits deserve clear attention, because the headlines tend to overstate what these charters mean. The most important point for any user is the one already emphasized: a crypto trust bank is not a full, insured retail bank. It does not carry federal deposit insurance, so assets held with a chartered crypto trust bank do not enjoy the government protection that backs ordinary bank deposits up to a limit.
A customer who assumes a “crypto bank” offers the same safety net as an insured retail bank is mistaken, and in a failure scenario, that misunderstanding could be costly. The charter brings supervision and legitimacy, which are real, but it does not transform custody into an insured deposit, and that distinction must not be lost.
Other limits and risks are substantial. The Federal Reserve master account that many firms seek remains unattained by any crypto-native firm and is far from assured, so the deepest integration into the financial system, and the reserve-safety benefits that come with it, are still aspirational instead of achieved. The charters themselves are often conditional, meaning the firms must still satisfy capital, governance, and risk-management standards before operating fully, and conditional approval is not the same as a fully operational bank.
Traditional banking groups have opposed extending charters and central-bank access to crypto firms, citing systemic-risk concerns, and that opposition could shape how far the privileges extend. There is also regulatory and political risk: the accommodating posture that opened the path to these charters could shift, and supervisory expectations could tighten. And the convergence itself carries a subtler risk, that bringing crypto firms inside the banking system concentrates new kinds of risk within the regulated perimeter in ways regulators are still learning to assess.
None of this negates the genuine progress the charters represent, but anyone evaluating a chartered crypto trust bank, whether as a user, an investor, or an observer, should hold a clear view of what the charter does and does not provide, treat the master account as a hope instead of a fact, and never mistake banking-grade supervision for deposit insurance.
Frequently Asked Questions
What is a crypto trust bank in simple terms?
A crypto trust bank is a chartered, bank-supervised institution built around custody and fiduciary services instead of deposits and lending, which a crypto firm uses to hold digital assets and manage stablecoin reserves inside the regulated banking system. It is a real, regulated bank, but a specialized kind: its job is safekeeping and trust services, not taking checking accounts or making loans. Crypto firms pursue this model because their central regulated need is custody, and a trust charter is purpose-built for exactly that, giving them banking-grade standing without the powers and obligations of a full commercial bank.
What does a national trust charter let a crypto firm do?
It lets the firm operate as a federally supervised trust bank, custodying digital assets and, under expanded rules, managing stablecoin reserves and providing certain payment-related services. Crucially, it lets the firm custody its own assets and reserves directly instead of depending on third-party banks, and it can replace the patchwork of state money-transmitter licenses with a single federal charter. It also confers the legitimacy and oversight of a banking institution. What it does not grant is the ability to take ordinary insured deposits or to make loans, so it is not a full retail bank.
Does a crypto trust bank have deposit insurance?
No, and this is one of the most important things to understand. National trust charters generally do not come with federal deposit insurance, the government protection that backs ordinary bank deposits up to a limit, because trust banks do not hold the kind of deposits that insurance covers. So assets held with a chartered crypto trust bank do not enjoy the safety net that an insured retail bank provides. A customer who assumes a “crypto bank” offers the same protection as an insured bank is mistaken, and that distinction could matter greatly in a failure. The charter brings supervision and legitimacy, not deposit insurance.
Why did so many crypto firms get charters in 2025 and 2026?
Several reasons converged. The biggest was independence from third-party banks, since crypto firms had repeatedly been hurt when partner banks closed their accounts or failed, and a charter lets a firm custody its own assets directly. A more accommodating regulatory environment opened a path that had been effectively closed, and the regulator approved a cluster of firms together. The rise of comprehensive stablecoin regulation made a charter close to a prerequisite for a serious stablecoin. And the legitimacy of a federal charter is a powerful selling point to institutional clients. Together these drove an industry-wide rush.
What is a Federal Reserve master account and why does it matter?
A master account is an account held directly with the central bank, granting direct access to its payment rails and to base money held at the central bank itself, instead of balances at a commercial bank. For a stablecoin issuer, it would allow holding reserves directly at the central bank, the safest possible place, eliminating commercial-bank counterparty risk and giving institutions strong confidence in the stablecoin’s safety. It is the real prize because it represents the deepest integration into the financial system, but the bar is extremely high, no crypto-native firm has yet been granted one, and applications remain pending with uncertain outcomes.
What does the trust-charter wave mean for the crypto industry?
It marks the convergence of crypto and traditional banking. The leading crypto firms are choosing to enter the regulated banking system as supervised institutions, accepting banking regulation in exchange for its legitimacy, stability, and access, a profound shift from crypto’s early ethos of operating apart from the traditional system. It is largely a stablecoin story, since charters speak directly to issuers’ need to custody reserves credibly. The convergence brings legitimacy and integration but also the constraints of regulation, and it signals a maturing industry whose leading firms increasingly resemble, and seek to operate alongside, traditional financial institutions.
This article is educational information, not legal, financial, or investment advice. Charter approvals, master account decisions, and regulations are evolving, and details reflect reporting available as of June 26, 2026, which can change quickly. Crucially, a chartered crypto trust bank is generally not covered by federal deposit insurance. Verify current information from primary sources before relying on anything described here.
Crypto World
Framework Ventures Raises $400M Fourth Fund to Expand Beyond Crypto into AI, Robotics, Energy
Framework Ventures, a venture capital firm that has long focused on crypto infrastructure, has closed its fourth fund after raising $400 million. The San Francisco-based firm said the new capital will be directed toward “frontier technology,” a mandate that includes both crypto and adjacent innovation areas such as artificial intelligence, robotics and energy, Fortune reported on Friday.
According to the report, co-founders Vance Spencer and Michael Anderson said roughly half of the fund has already been deployed. They did not name the fund’s limited partners. Cointelegraph previously reached out to Framework for additional details about the latest vehicle but did not receive a response at the time of publication.
Key takeaways
- Framework Ventures closed a $400 million fourth fund with a “frontier technology” scope that extends beyond blockchain.
- Co-founders Vance Spencer and Michael Anderson said about half of the capital has already been deployed.
- The firm frames the strategy as following its existing founder network into new tech categories rather than abandoning crypto.
- Framework’s track record includes major crypto investments across infrastructure and decentralized finance.
A broader mandate, framed as an extension of its founder network
While many crypto-focused VCs have increasingly talked about diversifying into artificial intelligence and other emerging sectors, Framework is positioning its latest fund as a continuation of where its ecosystem is already headed. Anderson said the firm is not merely chasing AI headlines; instead, it is investing alongside founders it already backs who are building products that touch multiple frontiers.
In the context of the fund’s launch, Anderson emphasized that investors should stay alert to the direction these founders are taking, adding that “We should pay attention.”
This approach is consistent with Framework’s earlier behavior: the firm has previously invested in companies outside purely on-chain categories, while still maintaining a strong presence in digital asset infrastructure.
Concrete examples of Framework’s cross-sector investing
Fortune’s coverage and Framework’s disclosed activity point to a pattern of investments spanning crypto-linked financial infrastructure and robotics data.
For example, Framework backed robotics data startup Mecka AI with a reported $60 million round in early June. Earlier in the year, it also partnered with mortgage lender Better to support up to $500 million in financing through the Sky stablecoin ecosystem. Separately, Fortune reported that Framework took a $45 million stake in Better—representing roughly 10% of the company’s stock—citing its earlier reporting on tokenized mortgages.
Together, these examples illustrate the strategy implied by the fund’s “frontier technology” language: Framework is looking for investment opportunities where digital asset infrastructure, capital markets, and new technology stacks intersect, rather than treating non-crypto areas as entirely separate bets.
Crypto still at the core: a portfolio built around major infrastructure names
Framework’s diversification does not replace its crypto focus so much as broaden the set of bets it can place. The firm, founded in 2019, launched its first crypto fund with an emphasis on early decentralized finance (DeFi) projects.
Framework’s portfolio includes well-known crypto platforms and infrastructure businesses such as Aave, Chainlink, Hyperliquid, Jito Labs and Plasma, according to the company’s portfolio page. The firm says it invests across multiple market cycles, prioritizing founders that build “infrastructure and products” in emerging digital asset markets.
That framing matters for investors because it suggests Framework is attempting to keep its selection criteria—supporting early builders in infrastructure—while expanding the technical domains those builders operate in. For traders and users, it also implies a continued likelihood of investment in the underlying systems that power on-chain finance and related applications, even as the investment lens widens.
How the new fund fits within Framework’s capital expansion
Framework’s fourth fund comes after several rounds of increasing fund sizes and a consistent focus on crypto during earlier vehicles. Fortune’s reporting ties the firm’s scaling to earlier fundraising, noting that Framework raised a $100 million second fund in 2021 and a $400 million third fund in 2022—both described as primarily crypto-focused.
In other words, the latest $400 million raise is not just another step up in ticket size; it represents a change in headline scope. The amount remains in line with the third fund, while the stated target audience for investments expands from primarily blockchain to additional frontier technology categories.
Framework has also drawn institutional attention previously. For instance, The Wall Street Journal reported that the firm raised a round backed by institutional support, underscoring that its fundraising momentum is tied to broader demand for credible crypto VC exposure. Coverage from Bloomberg similarly described how crypto VC firms were challenging the “traditional” look of legacy venture crowds by raising capital at meaningful scales during prior fundraising waves.
As Framework shifts the narrative from “crypto only” to “frontier technology,” investors will likely look for signals on how broadly that scope will be applied. The key question is whether future deployments will concentrate more heavily in AI, robotics and energy—or whether these sectors will primarily appear when they intersect with crypto-native infrastructure and capital formation.
Readers should watch how much of the fourth fund’s remaining capital continues to flow into crypto infrastructure versus non-blockchain frontier bets, and whether the firm’s portfolio announcements clarify what “frontier technology” means in practice beyond its early Mecka AI and Better examples.
Crypto World
AI will transform global financial markets by 2026, and DefiHash is attracting investor attention
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
AI-driven tools are increasingly shaping financial markets as investors turn to automated analytics for stocks, futures, and crypto decision support.
As artificial intelligence (AI) technology continues to penetrate the financial sector, the stock, futures, and cryptocurrency markets are ushering in new development opportunities. More and more investors are focusing on AI-driven data analytics, hoping to leverage intelligent tools to more effectively understand market dynamics and discover potential investment opportunities.
Against this backdrop, DefiHash has attracted considerable attention from users thanks to its AI-driven quantitative technology. The platform provides users with more convenient market information services through real-time data processing, intelligent analysis models, and automated market monitoring systems.
Christopher, from New York, first learned about DefiHash at a friend’s gathering. At the time, everyone was discussing the application of artificial intelligence in the stock, futures, and cryptocurrency markets, and DefiHash AI quantitative technology piqued his interest.
As an ordinary investor with no programming background and unfamiliar with complex quantitative trading strategies, Christopher had always believed that AI trading technology was only for professionals.
After learning more about the DefiHash platform, Christopher registered an account and tried out the platform’s AI quantitative services. After using it for a while, he found the platform simple and intuitive to use, and easy to get started even without a financial or technical background.
Christopher stated, “DefiHash is even easier to use than I imagined. Users don’t need to learn programming or study complex quantitative models; they simply register through the official website to access the platform, choose an AI smart contract suitable for their budget, and the system runs automatically, greatly lowering the barrier to entry for ordinary users to use AI technology.”
He stated that the platform was much simpler than he had imagined.
Users do not need to learn programming or possess complex quantitative knowledge; they can simply register through the platform’s official website to access the system and begin using its services.
Step 1: Register a DefiHash account
Users can complete registration in just a few minutes and receive a welcome reward from the platform.
Step 2: Choose a suitable AI smart contract solution
Based on individual needs and risk preferences, understand and select the different AI-driven quantitative solutions offered by the platform.
Step 3: Revenue settlement and flexible management
This system tracks market dynamics in real time and automatically executes corresponding strategies based on quantitative models, thereby improving trading efficiency, simplifying cumbersome operations, and helping users consistently achieve stable returns.
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Users can choose to withdraw their profits or continue participating in more plans according to their own needs, thus obtaining a more flexible asset management experience.
Here are some examples of AI-powered smart contract solutions on this platform:
| AI Smart Contracts | Contract amount | Contract period | Daily income | Principal + Returns |
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| NEXUS GRID-AI | $5,000 | 20 days | $77.5 | $5000.00 + $1550 |
Looking to the future: DefiHash explores new opportunities in the field of AI-powered finance.
Compared to traditional investment methods, DefiHash aims to lower the barrier to entry for AI-powered quantitative technology, making intelligent financial tools easily accessible to more ordinary users.
The platform requires no programming knowledge, no learning of complex quantitative strategies, and no lengthy market monitoring. Through AI algorithms, real-time data processing, and an automated operating system, users can more easily participate in the digital asset market and experience the efficiency improvements brought by AI.
Meanwhile, DefiHash integrates data resources from multiple markets, including stocks, futures, and cryptocurrencies. Its AI system monitors market changes around the clock, continuously analyzes massive amounts of data, and executes corresponding strategies based on quantitative models, providing users with a more intelligent service experience.
For many users who wish to participate in the digital asset market but lack the expertise and time, DefiHash offers a simpler and more efficient solution. Users can view account information, profit records, and contract status in real time through a visual backend. All data is open and transparent, facilitating personal asset management.
As AI technology continues to develop, more and more investors are paying attention to its practical applications in the financial field. DefiHash continues to innovate and upgrade its technology, committed to creating a smarter, more convenient, and more efficient AI-driven quantitative service platform for global users. Currently, DefiHash has launched services in multiple countries and regions worldwide, continuously attracting the attention of users in the stock, futures, and cryptocurrency markets. Industry insiders believe that with the deep integration of artificial intelligence technology and financial markets, intelligent quantitative services are expected to become one of the important directions for the future development of digital finance.
For those who are looking for the most promising low-asset startups or technology investment opportunities in 2026, visiting the DefiHash official website to learn about its latest AI quantification and computing power solutions could be the best starting point to seize this opportunity.
Disclosure: This content is provided by a third party. Neither crypto.news nor the author of this article endorses any product mentioned on this page. Users should conduct their own research before taking any action related to the company.
Bitcoin was unable to regain the $60,000 level on Friday, extending a period of subdued trading as broader risk assets remained under pressure. The move coincided with renewed weakness in Asian equity markets and continued sensitivity to macroeconomic data, reinforcing the close correlation between crypto prices and traditional market conditions.
For institutional participants, the episode is notable less for any single price point than for what it signals about market plumbing: liquidity and risk appetite appear to be responding to equity drawdowns and shifting expectations around inflation. While technical levels remain widely watched, the underlying drivers are predominantly external—particularly equity volatility and monetary policy expectations.
Key takeaways
- Bitcoin fell back below $60,000 on daily time frames for the first time since September 2024, according to charting data referenced by Cointelegraph.
- Equity weakness resurfaced in Asia, including a fresh activation of South Korea’s circuit-breaker mechanism.
- Traders and analysts pointed to the 200-week simple moving average (SMA) as a key technical threshold around the low-$60,000s.
- Commentary tied crypto’s near-term direction to inflation expectations, including a recent spike in the Personal Consumption Expenditures (PCE) index year-over-year.
Macro volatility and equity spillovers into crypto
TradingView data cited by Cointelegraph indicated that Bitcoin’s failure to hold above $60,000 marked the first daily close under that level since September 2024. In practical terms, the threshold matters because it often becomes a reference point for systematic and discretionary strategies that adjust exposure based on daily confirmation levels.
At the same time, Asia’s equity markets posted further losses. South Korea’s circuit-breakers were triggered following an approximately 8% decline, underscoring the severity of intraday risk reduction in one of the region’s major trading venues.
In the U.S., major indices were reported as mixed to slightly positive at the time of writing, with the S&P 500 and Dow Jones trading in the green while broader concerns about technology stocks persisted. Although the report described the U.S. session as avoiding immediate contagion, institutional risk teams typically treat such episodes as evidence of correlations increasing during stress—an important consideration for portfolio construction, margin management, and liquidity planning across crypto and legacy asset exposures.
Tech-stock drawdowns, inflation expectations, and risk-asset correlations
The market narrative also centered on technology-sector performance. While some earnings releases provided localized support—such as Micron Technologies posting stronger-than-expected results—the broader theme remained that tech exposure was still vulnerable to repricing.
Coin-related equity moves were also highlighted. The Kobeissi Letter, as discussed by Cointelegraph, referenced that many large technology companies are already trading more than 50% below their all-time highs, while Coinbase’s stock performance was cited as an example within that comparative framework. For compliance and governance teams, this kind of cross-asset observation is relevant because crypto firms and listed crypto-adjacent entities often face amplified operational impacts when equity markets reprice sector risk.
Separately, QCP Capital emphasized the importance of U.S. inflation trends for risk assets. Cointelegraph reported that the May Personal Consumption Expenditures (PCE) index—described as the Federal Reserve’s preferred inflation gauge—recorded its largest year-over-year increase since mid-2023. QCP’s note, as quoted in the report, included a view that core and headline PCE measures were still above target, and that the Fed’s 2026 inflation forecast had moved higher. The message for markets is straightforward: if inflation expectations remain sticky, the constraint on risk assets may be more about pricing future rates than near-term growth conditions.
“The Fed’s 2026 inflation forecast has also moved up to 3.6%, from 2.7%, reinforcing the view that inflation, rather than growth, remains the binding constraint.”
From an institutional perspective, this matters because it affects discount rates, hedging costs, and the behavior of liquidity providers across derivatives venues—factors that can translate into more conservative margin conditions and reduced depth in correlated instruments, including major crypto derivatives.
200-week SMA in focus as market structure debate continues
Looking at the crypto-specific picture, commentary from analyst Michaël van de Poppe raised the question of whether Bitcoin’s downward movement was continuing or whether it might be transitioning into a rebound phase. In the discussion, van de Poppe pointed to the timing of an upcoming quarterly options expiry event, which can influence volatility through positioning changes and hedging flows.
Van de Poppe also referenced the role of Strategy and its Bitcoin treasury-related funding vehicle, Stretch (STRC), noting that STRC experienced a relatively large drop while Bitcoin appeared to stall around $60,000. He characterized this as not being a weak signal in isolation, while also stating that bullish divergence on the daily timeframe remained unconfirmed.
The technical anchor repeated across the report was the 200-week simple moving average (SMA). At the time of writing, it was cited as approximately $62,243. The underlying institutional implication is that long-horizon moving averages frequently serve as regime indicators for trend-following and risk-managed mandates. When price action remains below such benchmarks, even if volatility compresses, some strategies may continue to reduce exposure—particularly where mandates require daily or weekly confirmations.
“It can signal that we’re bouncing back upwards, and, yes, the markets need to bounce back upwards in order to close above the 200-Week MA.”
Importantly, the discussion leaves open what would constitute confirmation. Unresolved uncertainty around whether $60,000 becomes support or continues to act as resistance typically determines how futures funding and derivatives positioning evolve in subsequent sessions. For compliance and operational planning, that distinction affects estimates of volatility, potential liquidation risk, and the need for tighter controls on collateral valuation and margin call thresholds.
Regulatory and institutional relevance: correlation risk under stress
While the report’s immediate catalysts are market-based, the broader institutional lesson relates to operational resilience during periods of heightened correlation between crypto and traditional markets. In stress environments, crypto exchanges and market makers often experience faster changes in order-book depth, funding dynamics, and intraday spreads—conditions that can amplify the downstream effects for custodians, payment processors, and regulated firms with exposure to crypto-related assets.
For firms subject to AML/KYC controls and licensing oversight, volatility also raises secondary concerns: heightened transaction activity can stress compliance operations; elevated off-platform transfers can increase the burden of monitoring; and cross-border flows can become more complex when liquidity fragments. Although this particular episode does not present new regulatory actions, it reinforces why governance frameworks built around market integrity, risk assessment, and customer protection remain essential in periods of instability. In Europe, for instance, MiCA implementation and ongoing compliance expectations continue to heighten the need for robust risk management practices across regulated custody, asset servicing, and stablecoin-related interfaces.
Cross-border differences in market supervision also matter: enforcement intensity and interpretive approaches to market conduct and custody standards can affect how quickly counterparties adjust onboarding, risk limits, and reporting workflows when market conditions deteriorate.
Closing perspective
Whether Bitcoin can reclaim and hold above key technical levels such as the $60,000 area and the 200-week SMA will likely remain intertwined with equity behavior and inflation-driven expectations. The next signal to watch is confirmation—through daily and longer-horizon price action—alongside whether macro conditions stabilize enough to reduce correlation-driven risk tightening across financial markets.
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