The Impact of XRP
Ripple Labs is optimistic that this ruling will pave the way for financial institutions to adopt the token for cross-border transactions. Many companies had distanced themselves from the altcoin due to the ongoing uncertainty surrounding the SEC case. Had the court ruled XRP as a security, many exchanges could have faced issues for listing unregistered securities.
XRP enables near-instantaneous transfers of funds, making it crucial for international financial transactions. It serves as a bridge currency for converting between different fiat currencies, which is highly valuable in the global finance sector.
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It’s important to note that the ruling appears to be based on the public understanding of the crypto sector from three years ago. The market has changed significantly since then, and the decision may not be applicable to all cryptocurrencies.
Nevertheless, this ruling marks an important step toward establishing a more comprehensive and clear regulatory framework for Bitcoin and other altcoins.
Potential Benefits for Exchanges
A key outcome of the ruling is the hope within the US crypto industry that the government will foster a better environment for cryptocurrencies to thrive. Many exchanges, including Kraken, Bitstamp, and Coinbase, have already reinstated XRP listings. Gemini is also considering introducing spot and derivative trading options for XRP.
The positive market sentiment is reflected in Coinbase’s stock price, which saw a noticeable increase after the ruling. Many believe the precedent set by the XRP ruling will benefit the ongoing Coinbase legal case.
Under US law, crypto sales can only be regulated if they involve securities. Since the court determined that cryptocurrencies sold on exchanges are not securities, the SEC may adopt a less restrictive approach toward the crypto sector.
Not the Final Word
Crypto enthusiasts have reason to celebrate this ruling as a victory for the sector. However, it’s important to recognize that this decision is not final. The SEC may still appeal the ruling, and the court has stated it did not address the legal status of secondary XRP sales. This implies that secondary transactions on exchanges could eventually be classified as securities.
The US Congress is still working on legislation regarding the crypto sector. Fortunately, there is bipartisan support for crypto, particularly Bitcoin. With many crypto advocates in Congress, it is likely that any forthcoming legislation will be fair and balanced.
Both Democrats and Republicans generally agree that cryptocurrency is the future of finance, and there is strong consensus that clearer regulations are needed for the sector.
Thoughts Final
The ruling on Thursday was a major win for Ripple Labs and the broader crypto industry. With sales to programmatic investors no longer being classified as securities, the SEC is less likely to interfere with retail transactions. Many US exchanges have already re-listed XRP. However, it’s crucial to remember that the SEC can still appeal this decision.
It’s anticipated that Congress will soon pass definitive crypto legislation. Given the overall support in Congress, the laws are expected to be both fair and reasonable.
