Ripple Optimistic as US Financial Institutions Consider Adoption of XRP Token for Cross-Border Payments
- Shams Ul Zoha
- July 18, 2023
- 2:55 pm
WHAT YOU SHOULD KNOW
- Ripple anticipates initiating talks with US banks and financial institutions in Q3 of this year to explore the adoption of its XRP-based On-Demand Liquidity (ODL) product for cross-border payments.
- A recent ruling in a New York court deemed XRP “not necessarily a security on its face,” contradicting claims made by the US Securities and Exchange Commission (SEC) against Ripple.
- Ripple hopes that the ruling will encourage financial institutions to consider its blockchain-based alternative to Swift, as it addresses challenges and high costs related to cross-border transactions.
Ripple is hopeful that US banks and financial institutions will adopt its XRP token for cross-border payments, following a recent ruling that deemed the token not necessarily a security. Stu Alderoty, Ripple’s general counsel, disclosed in an interview that the company plans to engage in discussions with American financial firms in the third quarter to explore the utilization of its On-Demand Liquidity (ODL) product, which utilizes XRP for efficient money transfers. The ruling by a New York judge partially contradicts claims made by the US Securities and Exchange Commission (SEC) against Ripple, with the company having contested allegations for the past three years.
The legal battle with the SEC has had a negative impact on Ripple’s business, leading to the loss of key partnerships, such as with MoneyGram. However, Ripple remains optimistic that the ruling will encourage financial institutions to consider the advantages of its services, including the use of blockchain technology to transmit messages between banks, providing a blockchain-based alternative to the traditional Swift system. Ripple aims to address the challenges and high costs associated with cross-border transactions, and Alderoty expressed hope that the ruling would spark conversations in the United States that could translate into tangible business opportunities.
While the ruling represents a significant development for Ripple, it is not a complete victory, and the company will carefully analyze the decision’s implications for its business. Ripple has consistently argued that XRP should be classified as a commodity rather than a security. The company’s focus now shifts to engaging with US banks and financial institutions, showcasing the benefits of its On-Demand Liquidity product and aiming to establish fruitful partnerships in the realm of cross-border payments.
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