After a recent ruling, Ripple’s General Counsel stated that US banks would contemplate adopting XRP for cross-border settlements.
In its lengthy battle against securities law violations, blockchain startup Ripple scored a significant victory against the U.S. Securities and Exchange Commission (S.E.C.) last week.
Now that Ripple’s native cryptocurrency X.R.P. is no longer classified as a security,’ the company is optimistic that U.S. banks and other financial institutions will become interested in using X.R.P. for cross-border payments.
In an interview with CNBC last week, Ripple’s general counsel, Stu Alderoty, stated that the company intends to discuss with U.S.U.S. financial institutions in the third quarter about using its On-Demand Liquidity (O.D.L.) product. This product facilitates efficient money transfers using X.R.P.
Alderoty responded affirmatively when asked if the ruling would prompt American banks to recommence using Ripple’s O.D.L. product: “I think the answer to that is yes.” Moreover, he added:
“I think we’re hopeful that this decision would give financial institution customers or potential customers comfort to at least come in and start having the conversation about what problems they are experiencing in their business, real-world problems in terms of moving value across borders without incurring obscene fees. Hopefully this quarter will generate a lot of conversations in the United States with customers, and hopefully some of those conversations will actually turn into a real business”.
During its two-and-a-half-year legal dispute with the S.E.C., Ripple had been sourcing most of its business from outside the U.S., Several U.S. partners of Ripple had severed ways with the company amidst its legal battle with the US SEC.
In March 2021, for instance, the U.S. money transfer colossus MoneyGram ended its partnership with Ripple. Similarly, Tetragon, a U.K.-based investor that had previously backed Ripple, repurchased its holdings from the company. This decision followed Tetragon’s unsuccessful attempt to redeem its funds by suing Ripple.
Use of Ripple X.R.P. For Money Transfer
X.R.P. is a form of digital currency used by Ripple for international money transfers. It is one of the largest available cryptocurrencies, with a value of approximately $37.8 billion.
Ripple uses X.R.P. as an intermediary currency when transferring funds between distinct types, such as dollars to pesos. This helps solve the issue of the receiving party requiring to have funds available in advance.
Ripple asserts that using X.R.P. permits money transfers to occur in a fraction of a second. However, the recent ruling is a partial victory for Ripple. Although the judge stated that X.R.P. is not an a’security,’ she added that Ripple’s institutional sales of X.R.P. are securities.
Alderoty stated that this portion of the ruling would not significantly affect Ripple’s current business operations because most of its consumers are outside the United States.
““We’ll study the the judge’s decision, we’ll look at our clients’ needs to look at the market, and see if there’s a situation here that complies with the four corners of what the judge found when it comes to institutions,”,” he said.
