Ripple, the company behind XRP cryptocurrency, foresees a growing interest from US banks in utilizing XRP for cross-border transactions following a recent partial victory in its legal battle against the US Securities and Exchange Commission (SEC). Stu Alderoty, Ripple's general counsel, shared with CNBC that they expect to begin discussions with American financial firms about employing Ripple's On-Demand Liquidity (ODL) product, which uses XRP for transfers, in the third quarter.
The landmark ruling by a New York judge has determined that XRP is not inherently a security, challenging the SEC's accusations against Ripple. However, the judge also ruled that Ripple's sales of XRP to institutional buyers do count as unregistered securities sales. Despite this, Ripple believes that the ruling will encourage US banks to engage in conversations about their potential use of XRP to transfer funds across borders while avoiding exorbitant fees.
Ripple currently generates most of its business from outside the US. XRP, the fifth-largest cryptocurrency by market capitalization, functions as a "bridge" currency between transfers of fiat currencies, enabling rapid money movements.
While the ruling does not consider XRP a security, it acknowledges that some sales of the token qualified as securities transactions. Ripple's general counsel acknowledged that this was not a complete victory but stated that the company will examine the judge's decision to determine how it affects their business.
