The ongoing legal battle between the U.S Securities and Exchange Commission (SEC) and Ripple Labs has taken a new turn as past comments from SEC Chair Gary Gensler resurfaced. In a 2018 interview, Gensler openly discussed XRP’s potential to serve as a bridge currency (a currency that facilitates exchange between two or more currencies and is used in international trade) between the banks, fueling speculations about the real purpose of the lawsuit.
Gary Gensler’s take on Bridge Currency
Before the lawsuit, Gary Gensler highlighted the importance of bridge currency and how XRP could be one of those bridge currencies to make the payments happen as SWIFT transactions are not always efficient for cross-border payments and to simplify the process, a bridge currency is needed that eliminates the need of nostra accounts used to hold reserves in foreign banks.
Before the SEC sued @Ripple, Gary Gensler acknowledged XRP as a bridge currency between banks.
That is proof that the SEC v. Ripple case is staged to introduce #XRP as the world’s bridge currency! pic.twitter.com/0T2HXkJSyl
— JackTheRippler ©️ (@RippleXrpie) September 15, 2024
The Speculation
With these past remarks resurfacing and the lawsuit that began in 2020, the community is buzzing with questions and speculations regarding the modus operandi behind the lawsuit against Ripple. As per the speculation that has been going around, it is believed that this could be a strategic move designed to make way for XRP’s official adoption in the mainstream financial sector which will allow it to play a larger role in the global finance sector.
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If Ripple becomes a widely accepted bridge currency, potential benefits can be:
- XRP could earn fees from transactions using XRPL bridge currency, generating an alternative revenue system.
- Increased adoption of XRP within the crypto community
- Reduced price volatility, making it stable cryptocurrency.
- Probability of defined regulatory guidelines to emerge that would reduce uncertainty for the XRP users.
- Increased scope for development and partnership.
- XRP could solidify its position in the global payment market.
The developments that have been made by XRP, and the growing need for efficient cross-border payments have led people to believe that the SEC v. Ripple case might be less about compliance and more about setting the stage for XRP adoption. If XRP does emerge as a global bridge currency, it could redefine the future of international banking.
Will XRP become the world’s bridge currency, as Gensler hinted, or will the legal battle derail its potential with the regulation compliance? Only time can tell but the signs are hard to ignore.
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