Legal expert and pro-XRP attorney Fred Rispoli recently provided an explanation for Ripple’s decision to launch a stablecoin backed by the US dollar later this year. Rispoli stated that the primary reason for this move is to enable US-based customers to use Ripple’s ODL solution, now known as Ripple Payments, for cross-border transactions. Instead of relying on XRP, US customers will have the option to use Ripple’s upcoming stablecoin for their transactions.
Rispoli made this remark while analyzing Ripple’s recent filing in the SEC lawsuit. Ripple had filed its opposition to the SEC’s opening remedies-related brief, in which the commission requested fines and penalties amounting to nearly $2 billion. In its filing, Ripple argued that the SEC had not provided sufficient reasoning for the need for sanctions or disgorgement, and suggested that the court should only impose a civil penalty not exceeding $10 million.
Rispoli noted that Ripple is well-positioned to win the remedies aspect of the lawsuit, but acknowledged that there are potential challenges that could affect Ripple’s chances of success.
To offer its ODL services to US-based customers, Ripple made changes to its operations in compliance with the court ruling. Most of its ODL operations have been conducted offshore, particularly in Singapore, where Ripple obtained an in-principle approval last year. In order to cater to US customers, Ripple decided to introduce a stablecoin that can be used instead of XRP for payments.
It is worth mentioning that the majority of ODL-related transactions currently utilize XRP as a bridge asset for instant cross-border settlements. Earlier this year, it was reported that 50% of all RippleNet transaction volume leverages XRP as a bridge asset via ODL.
Ripple announced its plans to enter the $150 billion stablecoin market by launching its own stablecoin later this year. The stablecoin will be integrated into Ripple’s payments platform and will cater to institutional players and the broader decentralized finance (DeFi) sector. Initially, the stablecoin will be available on the XRP Ledger and Ethereum, with plans to support other blockchains in future upgrades. US-based ODL clients will also be able to use the stablecoin for their payments.
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