• A recent legal ruling clarifies XRP is not automatically a security
• Ripple aims to discuss XRP adoption with US financial institutions
• SEC lawsuit challenged, alleging illegal XRP offering

Ripple, a blockchain startup, believes that US banks and financial institutions will become interested in using its XRP cryptocurrency for cross-border payments.

This confidence stems from a significant ruling that clarified that the token is not automatically classified as a security.

San Francisco-based blockchain firm Ripple is anticipating discussions with American financial institutions in the third quarter to explore the adoption of its On-Demand Liquidity (ODL) product, which leverages XRP for efficient money transfers.

This development comes after a significant legal ruling in New York last week, which declared that XRP is not automatically classified as a security.

The ruling challenges claims made by the US Securities and Exchange Commission (SEC) against Ripple, which has been engaged in a legal battle with the SEC for three years. The SEC alleged that Ripple and its executives conducted an illegal offering of $1.3 billion through XRP sales.

Ripple disputed these claims, asserting that XRP should be considered a commodity rather than a security. The SEC’s lawsuit had negative repercussions for Ripple, leading to the loss of a major customer and investor, MoneyGram, which ended its partnership in March 2021.

Additionally, UK-based investor Tetragon, a previous Ripple supporter, sold its stake back to Ripple after an unsuccessful attempt to sue the company.

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Ripple’s general counsel, Stu Alderoty, expressed confidence that the legal ruling would encourage American banks to re-engage with Ripple and utilize its ODL product.

Ripple also employs blockchain technology to facilitate secure communication between banks, serving as a blockchain-based alternative to the traditional Swift system.

“I think we’re hopeful that this 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,” Alderoty told the media on Friday.

“Hopefully this quarter will generate a lot of conversations in the United States with customers, and hopefully some of those conversations will actually turn into real business,” he added.

Ripple, the global payments company, has seen a significant shift in its business focus. According to Ripple’s General Counsel, Stuart Alderoty, the majority of the company’s business now comes from outside of the United States.

While Ripple still employs a substantial number of people within the US, its customers and revenue are predominantly driven by international sources.

With over 750 employees worldwide, approximately half of them are based in the U.S. Ripple utilizes XRP, a cryptocurrency, to facilitate cross-border money transfers. Currently ranked as the fifth-largest cryptocurrency, XRP has a market capitalization of $37.8 billion.