Thomas Daniels
Ripple, the prominent blockchain payments company, has transitioned its On-Demand Liquidity (ODL) services for U.S. clients from its native XRP token to Tether’s USDT stablecoin. This strategic pivot follows a pivotal court decision that declared the institutional sales of XRP tokens a violation of U.S. securities laws.
In response to the legal constraints, Ripple has recalibrated its business operations by partnering with entities outside the U.S. to manage XRP sales to its ODL clientele. This realignment facilitates U.S. clients to employ USDT as a bridge currency in their transactions, thus ensuring compliance and continuity in services.
Monica Long, President of Ripple, has been proactive in adhering to these regulatory demands, as noted by Moon Lambo, a prominent XRP-focused YouTuber. According to Moon Lambo, Ripple’s subsidiary in Singapore now acts as the principal entity for XRP sales, underscoring a tactical shift towards non-U.S. jurisdictions to navigate the legal complexities.
Furthermore, internal Ripple communications have disclosed new operational requirements, setting a minimum asset threshold of $5 million for ODL clients to bolster financial stability. These criteria are relaxed for larger, sophisticated organizations, demonstrating Ripple’s commitment to safeguarding its customers amidst regulatory scrutiny.
Moon Lambo also mentioned that ODL transactions are structured to avoid U.S. jurisdictional influence, allowing operations to proceed without legal impediments.
Following the 2021 Securities and Exchange Commission (SEC) mandate, Ripple initiated the comprehensive transition of its U.S.-based ODL users from XRP to USDT, integrating stringent asset prerequisites for enhanced regulatory adherence and service efficacy.
