Blockchain payments firm Ripple Labs Inc is now confident that its associated token Ripple (XRP) is now poised to enjoy massive adoption by financial institutions following its recent victory against the United States Securities and Exchange Commissions (SEC).
In an interview with CNBC Stuart Alderoty Ripple’s Chief Legal Officer shared his optimism about the future of the token and the firm. According to him, the blockchain firm will begin talks with financial institutions in the country about the use of its On-demand liquidity (ODL) services in the third quarter. Ripple’s ODL product allows users to utilize XRP, which is the fifth largest cryptocurrency, for efficient cross border payment.
While responding to the verdict from District Judge Analisa Torres of the Southern District of New York that, XRP as a digital token, is not an investment contract, thus, not a security, Alderoty asserts that the ruling will help ignite conversations with banking clients. The conversations in this regard will be focused on real-world problems encountered while moving value across borders. Adding that this conversations could lead to businesses opportunities.
Finally, Alderoty mentioned that the part of the Judge’s ruling which adjudged that Ripple’s institutional sales of XRP qualify as securities would not impact its business since most of its business is done by clients outside the US.
Impact of SEC’s Lawsuit on Ripple
Recall that in 2020, the US SEC sued Ripple for violation of securities law. The drawn out battle reportedly cost the firm about $200 million according to its CEO Brad Garlinghouse. In response to the lawsuit several of its US partners that utilized its services parted ways with it per the regulatory uncertainty. For instance, cross payments platform MoneyGram which utilized its service to process transactions ended its tie with the firm in 2021.
Likewise, several cryptocurrency exchanges including Coinbase, Kraken and Gemini delisted Ripple’s XRP on account of the lawsuit.
However after judgment on the lawsuit which lasted for almost three years, these platforms have promptly relisted the token. Consequently, Coinbase and its rival exchanges have started trading XRP. In response to the landmark victory, the crypto market soared with XRP leading the charge with an over 70% surge Week-to-Date (WTD).