Ripple Expects US Banks to Use XRP Crypto for Settlements Post SEC’s Ruling

After registering a big win against the U.S. Securities and Exchange Commission (SEC) last week in their long-going battle, blockchain startup Ripple is confident that this will open up new business avenues in the US along with the increased adoption of XRP for cross-border settlements, by American banks.

Stuart Alderoty, Ripple’s general counsel, told CNBC that the firms expects to start conversations and negotiations with American banks about using its On-Demand Liquidity (ODL) product. In the overseas market, Ripple has already deployed its XRP ODL product for cross-border settlements.

Ripple’s battle with XRP over the past 2.5 years has resulted into several financial players foregoing their partnerships in the US to avoid any scrutiny from the SEC. For e.g. back in March 2021, US money transfer giant MoneyGram ditched its partnership with Ripple.

Similarly, Tetragon, a U.K.-based investor that previously supported Ripple, sold its stake back to Ripple after its attempt to sue the company and retrieve its cash was unsuccessful.

When asked if the ruling meant that American banks would resume using Ripple's ODL product, Alderoty expressed confidence, saying, "Yes, I believe that's the case.”

Alderoty further added: “I think we’re hopeful that this decision would give financial institution customers or potential customers comfort to at least come in and start having the conversation about what problems they are experiencing in their business, real-world problems in terms of moving value across borders without incurring obscene fees. 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”.

 Ripple’s native cryptocurrency XRP helps move across the borders. With a market cap of $37.8 million, XRP is currently the fifth-largest cryptocurrency in the market. The company uses the token as a "bridge" currency to facilitate transfers between different fiat currencies, such as converting U.S. dollars to Mexican pesos. This helps eliminate the need for pre-funded accounts, allowing for faster processing of transactions. Ripple claims that XRP enables near-instantaneous money movements.

Note that this is just a partial victory for Ripple as the New York District Court judge said that Ripple’s institutional sale of XRP would qualify as securities. Alderoty acknowledged that the outcome was not a complete victory for Ripple, and the company will carefully examine the decision to understand its impact on its operations. “She [Judge Analisa Torres] found — although we had disagreed with her — that our earlier sales directly to institutional buyers had the attributes of a security and should have been registered,” he said.