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Ripple has switched its on-demand liquidity services for U.S. customers from XRP to Tether’s USDT stablecoin.
This follows a court ruling last year that found institutional sales of XRP tokens violated U.S. security laws. Consequently, Ripple has engaged entities outside the U.S. to facilitate sales of XRP to on-demand liquidity (ODL) clients, with U.S. clients now using USDT as a bridge currency for transactions.
Ok Matt. Didn’t have time yesterday but given that you were kind enough to cover this issue on YouTube I have followed up on the point you made about Ripple not having ODL customers and operating through overseas subsidiaries, in response to my concern that a wide injunction can… https://t.co/Lt2OflA9K6 pic.twitter.com/QmymbOEATV
— bill morgan (@Belisarius2020) April 26, 2024Moon Lambo, an XRP YouTuber, claims that Monica Long, President of Ripple, emphasizes swift compliance with legal restrictions while ensuring uninterrupted ODL services for U.S. customers.
Ripple President Monica Long says they don't have any ODL customers. According to Ripple's latest filing, a Singaporean subsidiary has ODL customers using $XRP, but Ripple itself does not. Would an injunction to stop's Ripple's ODL apply to Singaporean subsidiary? If not, then as…
— Moon Lambo (@MoonLamboio) April 25, 2024The YouTuber also stated that Ripple’s Singapore subsidiary is now the primary counterparty for XRP sales, indicating a strategic shift toward companies outside the U.S. to circumvent legal hurdles.
Additionally, internal communications revealed that Ripple has introduced minimum asset requirements for ODL clients with a threshold of $5 million to ensure financial sustainability. Exceptions are made for sophisticated organizations, reflecting Ripple’s commitment to protecting end customers in the face of regulatory challenges.
Moon Lambo also suggests that ODL transactions can continue unimpeded as long as they do not involve U.S. jurisdiction.
Following the SEC order in 2021, Ripple has taken steps to transition every ODL customer in the U.S. from using XRP to an intermediary currency, in this case, USDT. Last year, Ripple introduced a requirement that all ODL clients must have assets worth at least $5 million unless they are large financial institutions.
