Ripple Sees Banks Using XRP for Global Money Transfers Following Landmark Ruling
XRP, the native cryptocurrency of Ripple, will soon be the currency of choice for banks in cross-border payments. That’s according to the exchange’s General Counsel Stu Alderoty, in an interview with CNBC.
The statement comes after Ripple won a landmark case in a New York court last week, with a judge concluding that XRP is “not necessarily a security on its face.” A ruling that directly contradicts the opinion of the Securities and Exchange Commission (SEC).
Banks Using XRP in the Future, Hopes Ripple General Counsel
Alderoty told CNBC that he believed the ruling would bring financial institutions to its On-Demand Liquidity (ODL) product. With Banks using XRP for more efficient transfers of money internationally.
“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,” Alderoty said.
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“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,” he added.
Ripple uses blockchain to increase the speed and cost of payments and transferring money across borders. Its digital token, XRP, serves as a bridge currency to facilitate the exchange of different currencies on the RippleNet.
Ripple’s XRP Not Necessarily a Security, Says Judge
Ripple was locked in a high-stakes legal battle with the SEC for three years. The regulator accused Ripple and two of its executives of conducting an illegal offering of $1.3 billion worth of XRP.
Of course, Ripple disputed these allegations. The blockchain startup argued that XRP should not be classified as a security and should be treated as a commodity instead. XRP does not meet the Howey Test criteria for defining an investment contract, Ripple maintains.
On Thursday, July 13, The Southern District Court of New York ruled that programmatic sales of XRP to retail investors are not securities. However, the court did consider institutional sales of XRP as securities. Hence, Ripple’s legal troubles are not over.
The decision partly in favor of Ripple will ease worry over adopting XRP and some other cryptocurrencies in the United States. The nation has strict laws around the issuance, sale, and trading of securities.
The new ruling has put the crypto industry in a much better mood after a year characterized by regulatory crackdown.
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