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Ripple is making its way back into the US market after three years, following a partial victory against the US Securities and Exchange Commission (SEC) last year.
Blockchain-based digital payment network Ripple holds a BitLicense for virtual currency business in New York State and has received money transmitter licences (MTLs) in nearly 40 jurisdictions in the US, according to its latest market report.
“Licensing frameworks have helped establish regulatory clarity, attracting companies, entrepreneurs, investments, and fostering sustainable innovation,” the report stated.
Ripple is emphasising the importance of regulatory frameworks to its operations as it looks beyond the potential conclusion of the SEC case later this year. The SEC filed the lawsuit in 2020 alleging that the firm violated US securities law by selling its XRP cryptocurrency in the US as an unregistered security.
In July 2023, the judge found that XRP sales on public cryptocurrency exchanges were not unregistered securities offerings and subsequently rejected the SEC’s request to appeal.
In October, the SEC dropped charges against two Ripple senior executives alleging that they aided Ripple in unregistered securities sales.
The legal developments have given the company, which conducts 90 percent of its business outside the US, the confidence to take steps to re-engage with the US market.
“After being relatively quiet for the past 3 years in the US for Ripple Payments, we're geared up to announce new product updates powered by our MTLs that cover the majority of US states,” W. Oliver Segovia, Ripple’s senior director, head of product marketing – payments, said recently.
Ripple starts US relaunch
In November 2023, Ripple relaunched its RippleNet blockchain-based cross-border payments platform as Ripple Payments, starting in the US with plans to expand into other regions in 2024 based on jurisdiction.
Ripple Payments is designed for corporate clients that do not have their own money transmitter licence or extensive knowledge of blockchain and cryptocurrency technology.
New integrations with the XRP Ledger’s native decentralised exchange (XRPL DEX) aim to provide fast onboarding and reduce barriers to entering new markets by tapping into global liquidity options.
Expanded cryptocurrency liquidity options will allow Ripple to continue to meet customers’ liquidity needs on demand, regardless of the currency or end destination as the payments product scales.
“At Ripple, we’ve long known that payments are unequivocally the ‘killer app’ for digital assets. Achieving that vision requires a seamless experience for institutional users to solve real-world problems,” Brendan Berry, head of payment products at Ripple, said at the time.
With RippleNet, the company primarily focused on serving licensed financial institutions to transmit funds across borders instantly using XRP as a bridge currency. Now with Ripple Payments, US companies will be able to transfer funds to other users on the platform, enabling them to make cross-border payments to suppliers or overseas employees.
Ripple expects increased collaboration between fintech and crypto companies to close the gap between emerging and established financial technologies to resolve legacy pain points, Berry said when providing market predictions for the year ahead.
“In 2024, we expect that funding will rebound with a renewed focus on companies solving real-world problems and not centred purely around infrastructure — we’re going beyond this and focusing on the utility behind the tech.
“There’s recently been a major resurgence in payments, with crypto’s democratisation of finance front and centre. While many have previously focused on the speculative, users are now moving back to the tried and true baseline use case: payments.”
There is increased interest in crypto from fintech companies, and 75 percent of financial institutions are likely to explore digital asset services in the next three years, especially for cross-border payments, according to Ripple’s 2023 New Value Report.
