Ripple has been making significant progress, not only in the crypto markets but also in the global financial ecosystem as a whole. Now, as Ripple gets closer to regulatory clarity in the US following its legal victory against the SEC lawsuit, speculations are arising as to the potential for XRP to be recognized as legal tender.
A distant thought for sure, but what would it take for it to happen?
Ripple’s Strategic Partnerships
Although Ripple has been involved in a major lawsuit in the US for a few years now, it didn’t stop the firm from signing over 1,700 agreements with financial institutions worldwide. The goal of these agreements was to embed XRP in the global financial system. The partnerships have diverse geographical reach, including South America, Europe, and Asia.
BOOOOOOOOOOOOOOOOOOM!!!!
Over 1700 NDA’s between @Ripple and MAJOR banks, financial institutions, and companies! #XRP is going to be the most valuable asset in the world because it will bridge value globally! 👑 pic.twitter.com/xA2thWZ9TJ
— JackTheRippler ©️ (@RippleXrpie) August 18, 2024
Most notably, the Bank of Colombia and Montenegro’s central bank are testing central bank digital currencies (CBDCs) on Ripple’s platform. While Montenegro’s economy stands at a modest $ 8 Billion USD, the size of Columbia’s economy is massive, standing at around $400 Billion which makes it a top 40 country in the world.
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Becoming an aggregator for CBDCs in such large economies can be used as a case study for smaller economies, too. Additionally, Ripple’s partnership with Germany’s DZ Bank and Brazil’s Fenasbac shows that XRP can be used in multiple ways in the modern global financial infrastructure.
Ripple’s influence can be seen in Asia and the Middle East, too. They have partnered with SBI Holdings to enhance cross-border remittances across key markets such as Vietnam, the Philippines, and Indonesia. XRP’s acquisition of an MPI license from the Monetary Authority of Singapore and association with Dubai International Financial Centre show the versatility of its reach.
The Road to Legal Tender
Although XRP might have a headstart in partnerships, could it become a legal tender? Even though not recognized as one, the foundation of XRP to be a legal tender is being laid already. If it continues to expand its partnerships while navigating the evolving regulatory landscape in an efficient manner, XRP could eventually be recognized as a form of legal tender in jurisdictions that embrace digital currencies.
However, there are significant hurdles to overcome first. These include gaining regulatory approval in major economies and competing with other blockchains to be technologically ahead. The SEC lawsuit will play a significant role in determining the future of XRP.
Although XRP’s current pursuit of legal tender status can only be called speculative, as it is among the top blockchain other than Bitcoin that can achieve this status. The journey to achieve this might be long, but Ripple is certainly on the right path.
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