A sense of optimism and excitement swept through the Ripple (XRP) ecosystem today after the US District Court for the Southern District of New York decided that the company must pay a fine of $125 million for violating securities law. The ruling was welcomed as a resounding victory, given that the fine is significantly lower (~94%) than the $2 billion requested by the regulatory agency.
The court previously handed Ripple a partial victory last year, when it ruled that XRP is not a security and therefore trading it did not violate U.S. securities laws. The decision marks a watershed moment as it sheds light on the regulatory environment for XRP and other cryptocurrencies in the United States.
Following the announcement, market sentiment received a considerable boost as the price of XRP rose. What the judge ruled was that while Ripple violated federal securities laws by selling its XRP token directly to institutional investors, it did not violate federal securities laws by making the crypto asset available to retail customers through direct sales on cryptocurrency exchanges.
Now, the decision casts further doubt on how securities regulators set their rules to oversee the cryptocurrency industry.
A promising future for Ripple?
Beyond the partial legal victory, however, Ripple appears to have learned some important lessons from four years of litigation with the SEC. At least that’s what Ripple CTO David Schwartz suggested when he expressed optimism about Ripple’s business prospects outside the United States last month.
From what he said, it is clear that Ripple recognizes the importance of the US market, but the emphasis they are putting on the company's expansion shows that the regulatory challenges they are facing around the world are easier to address than in their home country.
So the next steps for Ripple will be to strengthen many of the plans it has announced, and as Schwartz pointed out, one of them is to launch its own stablecoin, which he describes as a means of holding, buying and trading dollars on-chain, specially designed for making payments.
Ripple’s USD is being designed to maintain its 1-to-1 peg to the U.S. dollar and availability will be subject to regulatory approval, the company notes on its website. Now, with its latest legal victory, Ripple is one step closer to achieving its goals with the launch of its own stablecoin.
Additionally, Schwartz spoke of mass adoption and multiple alternatives to solve different difficulties and find various use cases for cryptocurrency users through the XRP Ledger platform.
The company has also established several strategic alliances in the region and plans to participate in industry events to strengthen its presence and commitment to local development.
Ripple’s general counsel Stuart Alderoty revealed that the company has entered into a commercial agreement with the Central Bank of Brazil. With this, the XRP Ledger platform will offer support to create and manage digital assets for the Brazilian government, interested in the tokenization of treasury bonds and in exploring the potential of a Digital Real (DREX) or central bank digital currency (CBDC) of the South American country.
All in all, Ripple’s new legal victory not only boosts optimism around the ecosystem but also raises market enthusiasm, driving up the price of XRP. This outlook suggests a promising future for Ripple as it navigates regulatory challenges and seeks to strengthen its position in the global market.
