Ripple Attorney Says XRP Court Ruling Could Bring US Banks Back as Clients

Software company Ripple Labs is hoping American banks will start using XRP and its other products following a legal ruling interpreted as positive by investors last week. 

In an interview with CNBC, Ripple’s general counsel Stu Alderoty said he expected U.S. banks to go back to using the fintech firm’s On-Demand Liquidity (ODL) product. 

Ripple Labs is a San Francisco-based company which launched to help banks and other financial institutions move money quickly and cheaply via blockchain technology. It is the company behind the fourth largest cryptocurrency by market cap, XRP. 

Major banks and companies in the U.S. and around the world are already using crypto and its underlying technology for payments. JP Morgan last month went live with its first blockchain transaction for Europe-based corporate clients in Europe using its own token, JPM Coin. 

And German software giant SAP has announced an experiment to try and speed up overseas payments using Circle’s USD Coin stablecoin.

In 2020, the U.S. Securities and Exchange Commission hit Ripple with a $1.3 billion lawsuit, alleging that the company misled investors and was flogging unregistered securities in the form of XRP. 

But last week, federal district judge Analisa Torres of the Southern District Court of New York ruled that programmatic sales of XRP to retail investors did not qualify as securities. 

In a mixed ruling, the judge added that $728 million worth of contracts for institutional sales did constitute unregistered securities sales—but it was still interpreted as positive by many and the price of XRP soared, bringing many digital coins and tokens with it. 

Aldeory told CNBC Friday that he was hopeful the 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.”

He added that Ripple was hoping for a lot of “conversations” with U.S.-based customers this quarter following the judge’s decision. 

Ripple has been expanding outside of the States recently: the company’s blockchain, XRP Ledger, has been trialed for transparency purposes not necessarily related to finance. For example, Colombia’s government last year announced it would use the technology to make land ownership more transparent.