In the world of blockchain and digital currencies, the winds of change are blowing. Ripple’s XRP is riding the tide, poising itself for a breakthrough with the United States banks. This development comes in the wake of the company’s landmark victory against the Securities and Exchange Commission (SEC).
Ripple’s journey has been arduous. The SEC accused Ripple and its executives of raising over $1.3 billion through an unregistered, ongoing digital asset securities offering in 2020. Ripple’s vision of XRP’s global expansion and wider adoption faced a severe hurdle due to these legal challenges. However, the tide turned in 2023 when Judge Analisa Torres ruled that XRP was not a security, giving it the unique status of being the only token with “legal clarity”.
The legal clarity of XRP is seen as a stepping stone towards Ripple’s vision of wider adoption[^coinedition-2]. Ripple’s CEO, Brad Garlinghouse, has been hinting at this potential adoption by US banks. Ben Armstrong, a prominent voice in the blockchain sector, believes that the adoption of XRP by US banks is “the key to XRP’s success”.
The journey of XRP has seen its fair share of ups and downs. Armstrong pointed out a “fatal flaw” in Ripple’s software that hindered the banks’ adoption of XRP. The software did not mandate its users to hold XRPs, even though many banks leveraged Ripple’s software for cross-border transactions.
To address this issue, Ripple introduced RippleNet and ODL (On-Demand Liquidity), replacing the previous products. This innovation necessitates holding XRP for using Ripple’s blockchain, envisioning broader adoption of XRP tokens. Armstrong described this as “the true value proposition of XRP”.
As Ripple looks forward to the wider adoption of XRP, the company is optimistic that US banks and other financial institutions will show interest in using XRP for cross-border payments. Ripple’s general counsel, Stuart Alderoty, expressed hope that the recent ruling 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.
While the ruling was not a complete victory for Ripple, it was a significant step towards achieving its vision. Ripple’s CEO Brad Garlinghouse has been “very strategic” in steering the company towards this vision. As Ripple moves forward, the blockchain sector watches on with bated breath, waiting to see how this development unfolds.