Ripple Eyes US Banking Sector For XRP Adoption After Landmark Court Decision

Ripple is optimistic that U.S. banks and other financial institutions will begin to adopt its XRP token XRP/USD for cross-border payments.

This follows a significant ruling that the token is not necessarily a security.

Stu Alderoty, Ripple’s general counsel, revealed in an interview with CNBC that the San Francisco-based company anticipates initiating discussions with American financial firms in the third quarter about utilizing its On-Demand Liquidity (ODL) product, which employs XRP for money transfers.

A New York judge last week delivered a pivotal ruling for Ripple, asserting that XRP, a cryptocurrency closely linked with Ripple, was "not necessarily a security on its face."

This ruling partially disputes claims from the U.S. Securities and Exchange Commission against the company.

For the past three years, Ripple has been contesting allegations from the SEC that the company and two of its executives conducted an illegal offering of $1.3 billion through XRP sales.

Ripple has countered these claims, maintaining that XRP should not be classified as a security, and is more similar to a commodity.

Also Read: NAB Places Strict Restrictions On Crypto As Australia Cyber Scam Epidemic Escalates

The legal battle has negatively impacted Ripple's business, leading to the loss of at least one customer and investor. MoneyGram, a major U.S. money transfer company, ended its partnership with Ripple in March 2021.

Additionally, Tetragon, a UK-based investor that previously supported Ripple, sold its stake back to the company after an unsuccessful lawsuit to redeem its cash.

When questioned if the ruling would prompt American banks to return to Ripple to use its ODL product, Alderoty responded, "I think the answer to that is yes."

Ripple also employs blockchain in its operations to transmit messages between banks, serving as a blockchain-based alternative to Swift.

Alderoty expressed hope that the decision would encourage financial institutions to consider the benefits of Ripple's services, particularly in addressing the challenges and high costs associated with cross-border transactions.

He stated, "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 real business."

However, Alderoty acknowledged that the ruling was not a complete victory for Ripple and that the company would examine the decision to understand its impact on its business.

Read Next: Ethereum Sidechain Gnosis Launches Revolutionary Crypto Payment Network And Visa-Linked Debit Card

Join Benzinga's Future of Crypto in NYC on Nov. 14, 2023 to stay updated on trends like AI, regulations, SEC actions & institutional adoption in the crypto space. Secure early bird discounted tickets now!

Photo: Shutterstock