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Ripple Transitions U.S. On-Demand Liquidity Services to USDT Stablecoin
Ripple has made a strategic move by shifting its on-demand liquidity services for U.S. customers from XRP to Tether’s USDT stablecoin. This decision comes after a court ruling last year found that institutional sales of XRP tokens violated U.S. security laws. As a result, Ripple has turned to entities outside the U.S. to facilitate sales of XRP to on-demand liquidity (ODL) clients, with U.S. customers now utilizing USDT as a bridge currency for transactions.
Moon Lambo, a prominent XRP YouTuber, highlighted that Ripple’s Singapore subsidiary has now become the primary counterparty for XRP sales, indicating a shift towards companies outside the U.S. to navigate legal challenges. Moreover, internal communications revealed that Ripple has implemented minimum asset requirements for ODL clients, with a threshold of $5 million to ensure financial stability. Exceptions are granted to sophisticated organizations, showcasing Ripple’s dedication to safeguarding end customers amid regulatory uncertainties.
In response to the SEC order in 2021, Ripple has taken proactive steps to transition all ODL customers in the U.S. from XRP to an intermediary currency, specifically USDT. Notably, Ripple introduced a new rule requiring all ODL clients to have assets totaling at least $5 million, unless they are large financial institutions.
This strategic shift by Ripple underscores its commitment to compliance with legal regulations while ensuring uninterrupted services for its U.S. customers. The use of USDT as a bridge currency for ODL transactions reflects Ripple’s proactive approach to navigating regulatory challenges.
