XRP, the digital asset produced by Ripple Labs, is trending upwards. Bullish investors have high hopes that the cryptocurrency will soon hit the US$1.00 level.
This has left traders keen to trade in crypto like XRP and grow their assets.
The rally in the price of these assets should come as no surprise. Not only has Ripple made extraordinary progress in the ongoing SEC trial but banks are increasingly using Ripple technology again.
Two new major banking partners
The Canadian Imperial Bank of Commerce CIBC and the National Bank of Australia NAB recently announced that they would use Ripple for their cross-border transactions.
This is despite the reduction in XRP transactions caused by the court case with the Security Exchange Commission. SEC. These banks join more than 300 financial institutions from 45 countries that now use Ripple for their transactions.
The speed of Ripple transactions is one of the features that attract the banks to this cryptocurrency. The platform can do 1500 transactions per second. Though Solana is quicker, the transaction speed of many of the other cryptocurrencies makes them inefficient. Though XRP works on blockchain technology, it is not decentralized in the way that other cryptocurrencies are.
Ripple was designed to serve the needs of the financial services industry. The company has contracts with organizations across the globe, including the International Monetary Fund, the World Economic Forum, and the World Bank.
Ripple can process transactions between cryptocurrencies, and assets like gold, and fiat currency. It uses XRP as a bridge between the currencies. The fees are negligible with Ripple deducting just 0.0001 XRP per transaction. The system obviates the need for pre-funding of accounts.
SEC vs Ripple – where if it now
Ripple Labs, the creators of XRP, have been in a court battle with the SEC since December 2020. The SEC has accused Ripple and its co-founders, Brad Garlinghouse and Christian Larsen of using unregistered securities, namely XRP, to raise $1.3 billion in 2013. The price of XRP plummeted to $0.2481 following the charges.
The SEC has claimed that XRP is a security and is, therefore, subject to strict security rules. The SEC claims that securities fraud has taken place.
The SEC argues that since Ripple can decide when to release XRP, the company should have registered it as a security. Ripple claims that XRP is a digital currency and not a security. Since XRP isn’t a security, say, Ripple, the defendants have no charges to answer.
This month has brought positive news for Ripple in the case.
On the 11th of March, the judge produced two substantive verdicts. She rejected the SEC’s motion to deny the fair notice defense. She also denied the defendants’ motion to dismiss the case.
The SEC requests a delay
On the 21st of March, the SEC asked for a week’s extension to allow them time for further exploration of the case. The defendants opposed the extension. The SEC has delayed the lawsuit several times despite the defendants’ wish to speed it up so that the company can get back to business as usual. The defendants’ conduct during the case has shown that they intended to comply with the laws.
Ripple has already won a number of procedural wins. The feeling amongst experts is that they might have this one in the bag. Some SEC officials have already conceded that digital currencies are not securities.
Ripple was also not given fair notice of the fact that the SEC was investigating the company. It is, therefore, likely that Ripple will win their case or in the worst case they may have to pay a small settlement.
The decision in the case will have a major impact not only on Ripple but on the entire crypto industry.
The SEC action has resulted in a slowdown in the use of XRP, but already Ripple is reaching the market cap prices of Solana and Cardano. Will it reach US$1.00 and more?