Ripple state U.S. banks and other financial institutions in the country will start adopting its XRP token in international payments after a critical ruling indicated the token was not necessarily a security.
In an interview last week, Ripple stated, the San Francisco-based company expects to start talks with American financial firms about using its On-Demand Liquidity (ODL) product, which utilizes XRP for money transfers.
Last week, a New York judge ruled that XRP itself is not necessarily a security on its face, contesting, in part, asserted by the U.S. Securities and Exchange Commission against the firm.
An Ongoing Battle With SEC On Fraud Claims
Ripple has been fighting SEC on an ongoing allegation that Ripple and two of its executives operated an illegal $1.3 billion sale via XRP.
Subsequently, Ripple’s business suffered, and the firm lost at least one customer and investor. MoneyGram, the U.S. money transfer giant, ditched its partnership with Ripple in March 2021.
Meanwhile, Tetragon, a U.K.-based investor-backed Ripple, sold its stake back to Ripple after unsuccessfully trying to sue the firm to redeem its cash.
When asked whether the ruling meant that American banks would return to Ripple to use its ODL product, Alderoty said: I think the answer to that is yes.
Ripple also uses blockchain in its business to send messages between banks, kind of like a blockchain-based alternative to Swift.
In a statement, Alderoty says, 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.
However, the ruling did not represent a dominant win for Ripple. While the judge stated XRP was not a security, they also said that some sales of the token did qualify as securities transactions.
Alderoty agreed it’s not a total win for Ripple, and that the firm would study the decision in due course to see how it affects its business.