Ripple expects US banks to favor XRP following court ruling

Ripple's chief legal officer anticipates that US banks will resume using the company's On-Demand Liquidity (ODL) product and XRP token for cross-border transactions following a partial victory against the SEC.

Ripple anticipates US banks will favor XRP following court ruling

Ripple predicts that US banks and other financial institutions will return to using its On-Demand Liquidity (ODL) product and XRP as a bridge between fiat and international payments, following their partial victory against the SEC.

In a CNBC interview last week, Stu Alderoty, Ripple's chief legal officer, indicated they would begin negotiations with financial firms this quarter. When asked whether US banks would use Ripple's ODL product post-ruling, Alderoty expressed optimism: "I think they will."

"We hope this decision will at least provide customers the comfort to start having discussions about the issues they are facing in their business," Alderoty added.

Bank of America experimented with Ripple's technology in 2019. Additionally, American Express and Santander partnered to deploy international money transfer services back in 2018. The majority of Ripple's customers are currently located outside the US.

At the end of 2020, the US Securities and Exchange Commission (SEC) filed a lawsuit against Ripple for unlawfully raising $1.3 billion through XRP sales. The allegations adversely affected business operations, causing Ripple to lose customers and investors. Consequently, numerous exchanges delisted XRP.

Just last week, the presiding judge in this three-year lawsuit issued a statement that XRP sales agreements are not considered investment contracts, partially favoring Ripple. According to Judge Analisa Torres, selling XRP to third-party institutions through direct agreements or over-the-counter transactions still falls under securities laws, except when traded through an intermediary exchange.

Following this statement, the market celebrated alongside Ripple, with Bitcoin nearly surpassing the $32,000 mark and altcoins showing similar movements. Notably, many large and small exchanges announced the resumption of XRP support.

Regarding XRP specifically, the coin has also achieved significant milestones. Its price peak increased by nearly 100% within the day, accompanied by a thousand percent surge in trading volume. At the time of writing, XRP is trading around $0.74 USD and ranks as the fourth-largest cryptocurrency with a market capitalization of $38.5 billion USD.

1-hour chart of XRP/USDT pair on Binance at 09:40 AM on 18/07/2023

After a partial setback, the SEC has left open the possibility of an appeal. However, Katie Haun, former Department of Justice prosecutor, noted that appealing court decisions is typically challenging.