Ripple Seeks Irish Licenses, Seeking to Bring Crypto-Powered Cross-Border Payment to EU
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Ripple Seeks Irish Licenses, Seeking to Bring Crypto-Powered Cross-Border Payment to EU

Created 1yr ago, last updated 1yr ago

Ripple is seeking to enter the European market, saying it wants to offer fast, inexpensive and 24/7 international payments settlement in the EU.

Ripple Seeks Irish Licenses, Seeking to Bring Crypto-Powered Cross-Border Payment to EU

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Ripple is planning a move into Europe, starting with a pair of Irish licenses that will let it "passport" into the EU, its general counsel said.

In an interview published on Friday, Stuart Alderoty told CNBC that the cross-border payments firm is seeking a virtual asset service provider license from the Central Bank of Ireland, and plans to apply for an Electronic Money Institution license "shortly."

Ripple uses blockchain technology and the XRP cryptocurrency at the core of a network that allows banks and other financial firms to move funds internationally in near-real time and for very small fees, and is up and running 24/7.

International transfers via the traditional SWIFT network can take days to finalize and are very expensive — and only works banker's hours. At the bottom end of the scale, a $200 remittance sent home by a migrant worker can cost $7 to $15 or more depending on where it is going.

Aside from expanding into the EU, Ripple is expanding outside the U.S., where it has spent the past two years fighting a Securities and Exchange Commission lawsuit.

That case accuses it and two top executives of selling an unlicensed security — specifically XRP, a token created by several of Ripple's founders in 2012 — in what now amounts to a 10-year-long illegal securities sale.

Ripple denies that XRP is a security. It is the first crypto firm that has challenged in court the SEC's long-held claim that virtually all cryptocurrencies except bitcoin are securities — which greatly limits their utility both as an asset and as a payments currency.

Wide Industry Backing

The Ripple case has drawn a great deal of interest and support from the crypto community, because it will provide the first court ruling on whether cryptocurrency tokens are securities.

Much of the crypto industry claims cryptocurrencies are not investment contracts under the purview of the SEC but commodities that should be regulated by the Commodity Futures Trading Commission. That disagreement is at the core of the industry's long lobbying campaign to influence ongoing legislation to create a permanent regulatory framework for crypto.

That campaign suffered a severe setback this month with the collapse into bankruptcy of the FTX and FTX US cryptocurrency exchanges and their related companies. That's both because of the scandal — customer funds were used to cover sister firm Alameda Research's trading losses — and because its former CEO, Sam Bankman-Fried, was an extremely high-profile member of that lobbying effort.

The case is heading into its final round, Alderoty said, noting that final briefs are due Nov. 30, and then the federal judge hearing the case will either issue a ruling or send it to a jury trial. Alderoty said he expects a ruling by mid-2023.

Because of the trial, most of Ripple's business is outside the U.S., where the SEC actions make it difficult for companies to use with confidence. That is a main driver behind its move into the EU, Alderoty said, adding that "effectively, Ripple is operating outside of the U.S."

In October, Ripple announced partnership with two EU firms, Paris-based payments provider Lemonway and Swedish money transfer provider Xbaht.

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