US Banks Likely to Adopt $XRP Following Landmark Ripple Ruling

In a significant development for the cryptocurrency industry, United States banks are showing renewed interest in Ripple’s cryptocurrency, $XRP, following a key ruling that determined XRP is not categorically a security. This paves the way for broader adoption in cross-border payments. Ripple, a San Francisco-based blockchain startup, anticipates entering discussions with American financial institutions in the upcoming third quarter about leveraging its On-Demand Liquidity (ODL) product, which employs XRP for financial transactions.

This revelation comes from Stu Alderoty, Ripple’s general counsel, during an interview with CNBC. A New York judge recently ruled that XRP does not inherently qualify as a security, challenging the U.S. Securities and Exchange Commission’s prolonged legal action against Ripple. The SEC’s contention was that Ripple and two of its leading executives executed an unlawful $1.3 billion offering through XRP sales.

🚨BREAKING: UNITED STATES OF AMERICA BANKS TO BEGIN USING $XRP FOLLOWING #RIPPLE ANNOUNCEMENT pic.twitter.com/5SO8hV6f2Y
— CryptoGeek (@CryptoGeekNews) September 18, 2023

Despite Ripple’s firm stance that XRP should be classified more as a commodity than a security, this legal entanglement impacted its operations. Notably, MoneyGram, a significant U.S. money transfer entity, terminated its alliance with Ripple in March 2021. Simultaneously, Tetragon, a U.K.-based investor formerly supporting Ripple, sold its stake back after an unsuccessful legal action to reclaim its investment.

When asked about the potential return of American banks to the ODL product, Alderoty expressed confidence, saying, “I think the answer to that is yes.” Ripple also offers a blockchain-driven alternative to traditional systems like Swift, aiding banks in intercommunication. Alderoty hopes the latest ruling will motivate more financial institutions to explore Ripple’s solutions, which promise efficient cross-border transactions without exorbitant fees.

Although most of Ripple’s clientele now hails from outside the U.S., the company remains heavily staffed stateside, employing around 450 of its 900 global workforce within the country. Currently, XRP ranks as the fifth-largest cryptocurrency, boasting a market cap of $37.8 billion. Ripple utilizes XRP as an intermediary currency for seamless conversions, such as from U.S. dollars to Mexican pesos, eliminating the need for pre-funded accounts and expediting transfers.

However, the judgment was not an unequivocal victory for Ripple. While the court determined XRP wasn’t a security, it noted some XRP sales did resemble securities transactions. Alderoty acknowledged this nuanced outcome and mentioned Ripple’s intent to thoroughly review the judgment to comprehend its broader implications.

Judge Analisa Torres found although we had completely disagreed with her that our earlier sales directly to institutional buyers had the attributes of a security and should have been registered,” Alderoty commented.

Regardless of the intricacies of the decision, Ripple’s current business trajectory remains primarily unaltered due to its significant international presence. The company intends to analyze the ruling closely and adapt as needed to cater to its clientele and market conditions.