Ripple’s ongoing legal battle against the US Securities and Exchange Commission (SEC) is known to have had some negative effects on the company. And now, Ripple’s Chief Technology Officer (CTO) David Schwartz has given an insight into how much the lawsuit has affected the company.
SEC’s Lawsuit Made Ripple Lose Stablecoin Deal
Schwartz revealed during a space on the X (formerly Twitter) platform that Ripple was close to signing a deal with an undisclosed stablecoin issuer in the last quarter of 2020, but the deal never materialized because it was around that period the SEC filed a lawsuit against the crypto firm.
It is possible that the stablecoin issuer likely backed out of the deal to avoid being dragged into the lawsuit between Ripple and the Commission.
Ripple has been in a long-running legal battle with the SEC, with the Commission alleging that the crypto company’s sale of its XRP token constituted an investment contract that invariably makes XRP a security.
Despite this, the company has continued to build towards establishing itself as a decentralized payment system, and Schwartz revealed that as part of its efforts, the company is looking to “integrate the DEX use into ODL.”
ODL stands for Ripple on-demand liquidity, which helps customers transfer money globally without needing any centralized financial institution to be involved. The company aims to create a financial system that is more seamless, faster, and cheaper than the existing financial structure.
Schwartz also touched on the capabilities of Prisma, and how it can help optimize liquidity across the ecosystem by tapping into liquidity from various exchanges. This is because Prisma also makes it easier to facilitate large down transactions by breaking them into smaller and more manageable bits.
XRP price falls to $0.502 | Source: XRPUSD on Tradingview.com
The Importance Of Stablecoins To Its Plan
Stablecoins are integral to Ripple’s implementation of the ODL. These fiat-backed tokens will make it easier to settle cross-border transactions in the stablecoin that is pegged to customers’ local currency.
As such, the company is still looking to partner with banks and other financial institutions that could issue stablecoins on the XRP ledger.
It is believed that the crypto company could get more favorable responses compared to when the SEC’s lawsuit began, seeing that Ripple has enjoyed a significant victory over the regulator, and many analysts still project the SEC to lose when the trial commences.
These developments come at a time when the blockchain is set to introduce a new rippled version of the XRP ledger, which could introduce a novel automated market maker (AMM) design on the DEX. The update is expected to be released on September 11, 2023.
Featured image from Analytics Insight, chart from Tradingview.com