- Ripple has achieved a significant victory in its long-standing battle with the US Securities and Exchange Commission (SEC) regarding securities law violations.
- Stu Alderoty, Ripple’s General Counsel, stated that the company will engage in discussions with US financial institutions regarding the use of Ripple’s On-Demand Liquidity (ODL) product in the third quarter.
- During Ripple’s legal battle with the SEC, many US partner companies had severed ties with the company. For instance, MoneyGram, a major US money transfer giant, terminated its partnership with Ripple.
Ripple’s victory in the SEC case could prompt US banks to use Ripple again and expand Ripple’s business opportunities.
US Banks May Start Using Ripple
Last week, blockchain company Ripple achieved a significant victory in its long-standing battle with the US Securities and Exchange Commission (SEC) regarding securities law violations.
Since Ripple’s native cryptocurrency XRP is no longer classified as a “security,” the company believes that US banks and other financial institutions will begin showing interest in using XRP for cross-border payments.
Stu Alderoty, Ripple’s General Counsel, mentioned that the company will engage in discussions with US financial institutions regarding the use of Ripple’s On-Demand Liquidity (ODL) product in the third quarter. This product utilizes XRP for efficient money transfers.
When asked if American banks will start using Ripple’s ODL product again, Alderoty responded positively, stating, “I think that will happen,” and added:
“We hope this decision will bring comfort to financial institution customers or potential customers and that they will come to the table to start talking about the real-world problems they have in moving value across borders without paying high fees. We hope this quarter results in a lot of conversations with customers in the United States and we hope some of those conversations turn into real business.”
While Ripple has been engaged in a legal battle with the SEC for the past two years, it had been providing most of its services from outside the United States. During Ripple’s legal battle with the SEC, many US partner companies had severed ties with the company. For instance, in March 2021, MoneyGram, a major US money transfer giant, terminated its partnership with Ripple.
Similarly, Tetragon, a UK-based investor that had previously supported Ripple, sold its shares in the company. This decision came after Tetragon’s attempt to sue Ripple in order to reclaim its cash was unsuccessful.
Use of Ripple in Money Transfer
XRP is a digital currency used by Ripple for international money transfers. It is one of the largest cryptocurrencies and is valued at approximately $37.8 billion.
Ripple uses XRP as an intermediary currency for transferring funds between different types, such as from US dollars to Mexican pesos. This helps solve the problem of needing ready cash on the receiving end of the transfer.
Ripple claims that using XRP enables extremely fast money transfers, taking only a few seconds to complete. However, the recent court decision is not a complete victory for Ripple. While the judge stated that XRP is not considered a “security,” they added that Ripple’s corporate sales do qualify as securities.
Alderoty stated that this aspect of the decision will not significantly impact Ripple’s current business operations since most of its customers are located outside the United States.
