• 20 hours The Fastest Growing Energy Sectors Of 2019
  • 2 days How To Spy On Yourself: The Doorbell To End Civil Liberties
  • 3 days Analyst Predicts Tesla Stock Will Soar To $500
  • 4 days Australian Billionaire To Invest In $88 Million Struggling Solar Project
  • 5 days Twitter-Shaming: The Biggest Threat To Any Business
  • 5 days Canada Looks To Become A Major Source For Critical Minerals
  • 5 days Hedge Funds Are Piling Into This Key Commodity
  • 7 days Trade Deal Not Likely Before Christmas 2020
  • 7 days America's $16 Trillion Debt Bubble Is About To Burst
  • 8 days Black Friday Breaks Online Shopping Records
  • 8 days Tesla's Biggest Competitor Is Hiding In Plain Sight
  • 9 days Are Celebrities Good Or Bad For Cannabis Stocks?
  • 10 days Venezuela’s Crisis Continues As Maduro Spends $5 Billion On Oil Deals
  • 11 days Elon Musk Claims 250,000 Orders For Cybertruck
  • 12 days How To Survive Thanksgiving Politics With Cannabis Gravy
  • 13 days The Fragility Of Monetary Policy
  • 14 days 5 Oligopoly Stock Picks For Your 2020 Portfolio
  • 14 days $7 Trillion In Unfunded U.S. Pensions As Domestic Debt Hits A Record High
  • 15 days Retail Is Alive And Well, But Only For The Rich
  • 15 days New Tech Could Unchain The Solar Revolution
Stablecoins: The Next Trend In Cryptocurrencies

Stablecoins: The Next Trend In Cryptocurrencies

Coinbase announced that Circle's USD…

SEC Crackdown On ICOs Leads To New Lawsuits

SEC Crackdown On ICOs Leads To New Lawsuits

Crypto-related lawsuits are on the…

Will Facebook’s Crypto ‘Libra’ Challenge Bitcoin?

Will Facebook’s Crypto ‘Libra’ Challenge Bitcoin?

Facebook has finally revealed its…

Fred Dunkley

Fred Dunkley

Writer, Safehaven.com

Fred Dunkley is a tech analyst, writer, and seasoned investor. Fred has years of experience covering global markets and geopolitics. 

Contact Author

  1. Home
  2. Cryptocurrencies
  3. Alt-Coins

Ripple’s Legal Limbo Weighs On XRP Prices

Ripple

Three financial firms have just taken xRapid commercial, enabling cross-border transactions using Ripple’s XRP cryptocurrency in a matter of minutes—but these ripples aren’t turning into waves on the market just yet.  

It’s a major bit of news for the third-most-valuable digital currency on the market, but XRP’s legal status is still cloudy and the SEC hasn’t said whether it’s a security or not.   

So for now, this major breakthrough isn’t doing much for XRP prices. Ripple was even trading down 4 percent on Tuesday morning:

(Click to enlarge)

Source: Coin Gecko

It should be a pretty big development. After all, it’s the first time that XRP will be used in commercial application by three financial services firms—payment providers Mercury FX and Cuallix, and financial firm Catalyst Corporate Federal Credit Union.

But what’s missing are banks.

While Ripple predicts that “dozens” of banks will be using XRP by the end of next year, we’re not quite there yet, and the first are most likely to be those focused on money transfers to emerging markets.

Again, it’s a regulatory question and banks deal with emerging markets have more “forward-looking regulation” and as such are positioned to be the eventual first adopters, according to Ripple itself. Big lenders won’t be jumping on board until there’s quite a lot more clarification on the regulatory field—and because Ripple’s business model has financial institution deals as a core revenue source, this first commercial breakthrough doesn’t look as big below the surface.

XRP managed to hit a high a couple of weeks ago when Ripple Lab’s had its head of regulatory relations for Asia-Pacific and the Middle East give an interview to CNBC where xRapid was promoted, giving XRP prices a sharp boost. But it was short-lived—even with Bill Clinton taking the stage at Ripple’s big Swell event. Related: Why Gold Investors Should Pay Attention To The Swiss Franc

As it stands, XRP has lost 80 percent since last year’s big surge when it hit over $3 dollars after seeing only $0.006 in 2017.

But it’s still in the running for the No. 2 crypto, hoping to unseat Ethereum.

(Click to enlarge)

Source: Coinmarketcap

Still, it should be a major feather in Ripple’s cap—regulatory uncertainty aside.

Speaking to Fortune, MercuryFX CEO Alistair Constance said the economics of joining xRapid’s early testing was brilliant. They ran two pilots that saw them send several thousand dollars to a charity in Mexico and the result was a lot cheaper, and a lot faster.

According to Constance, using the SWIFT international payments network took 2-3 days and cost $40-$75 dollars per transaction, while xRapid allowed them to make transactions in two minutes for less than 2 cents.

Everyone is waiting for the regulatory bad news. Right now, it’s pure uncertainty, but if regulators decide to classify XRP as a security, the commercial adoption of xRapid could stop where it’s started.

Ripple has seen a collection of lawsuits claiming that XRP is a security.

In late August, a California Superior Court suit filed by an investor was formally designated as “complex litigation”, Coin Desk reports, while another similar suit was deemed complex in June.

But the SEC has refrained from making distinctions yet as to which cryptocurrencies are securities, and which aren’t. This uncertainty has kept the entire cryptoworld in limbo.

Earlier this week, in fact, a group of U.S Congressmen called on the SEC to make a clear distinction

“[…] It is important that all policymakers work toward developing clearer guidelines between those digital tokens that are securities, and those that are not, through better articulation of SEC policy, and, ultimately, through formal guidance or legislation,” the lawmakers wrote in an open letter.

“Current uncertainty surrounding the treatment of offers and sales of digital tokens is hindering innovation in the United States and will ultimately drive business elsewhere. We believe that the SEC could do more to clarify its position.” 

By Fred Dunkley for Safehaven.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment