JP Morgan: “If Ripple wins SEC lawsuit, XRP is poised for significant adoption”

Rick Steves

“If the company is able to win the SEC lawsuit and trading resumes on major cryptocurrency exchanges like Coinbase, XRP is poised for significant adoption”.

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JP Morgan’s North America Equity Research report published earlier this month puts XRP in the spotlight, even stating the digital asset is poised for significant adoption.

While the price of XRP has fallen in recent days, along with the rest of the cryptocurrency market, Ripple Labs has been working non-stop in signing new partners for its RippleNet network and On-Demand Liquidity service, thus spreading the use of XRP, especially in the cross-border payments space.

 

XRP vs SWIFT

The JP Morgan report started out by stating “XRP was engineered to facilitate transactions on Ripple’s blockchain-based digital payment network. Benefits of the network include expedited payments and reduced transaction fees”.

The paper mentions its founding date, 2012, and co-founders Jed McCaleb (who has left the company to launch Stellar) and Chris Larsen (who is a co-defendant in the XRP lawsuit filed by the SEC).

“While traditional money transfers – most commonly SWIFT transfers – are costly and can take up 5 business days to complete, transactions using Ripple’s XRP can be completed in as little as 3 to 5 seconds and transaction fees are just 0.0001 XRP. SWIFT transfers are more expensive due to the numerous intermediary banks involved that charge fees to both the sender and recipient.”

The Ripple network includes more than 100 financial institutions, including Bank of America, Santander, and American Express.

XRP vs stablecoins

Then, the JP Morgan document explained XRP’s unique value in comparison to stablecoins using the words of Ripple’s senior director of global operations Emi Yoshikawa.

“The role of XRP as a bridge asset in international settlement is not competing with stablecoins but on the contrary, it is complementary.”

XRP is not pegged to an underlying currency unlike stablecoins, which follow their underlying currency’s volatility.

XRP vs SEC

The SEC v. Ripple lawsuit is an inevitable topic of discussion for XRP. On that matter, JP Morgan points to the Howie test as the end goal and gives away the likelihood of a Ripple win.

The Howie test says that an investment contract exists when these four conditions are met: investment of money in a common enterprise with the expectation of profit to be derived from the effort of others.

“For the SEC to win the suit, Judge Sarah Netburn […] must determine that all aforementioned four points are met; if she determines that one or multiple points are not met, Ripple will win the suit”.

“If the company is able to win the SEC lawsuit and trading resumes on major cryptocurrency exchanges like Coinbase, XRP is poised for significant adoption”.

More news on Ripple (XRP):

Why has XRP lawsuit gone silent?

SEC v. Ripple got XRP delisted but Jed McCaleb sold $2b in 2021: double standard?

Ripple’s string of wins analyzed, XRP lawsuit to drag on until Spring 2022

SEC v. Ripple: What to wait for in XRP lawsuit agenda?

Ripple brings fight to lawmakers to put an end to “SEC hostility”

Did Ripple lie about its XRP-powered liquidity platform?

Legal experts analyze SEC v. Ripple as cautionary tale for market participants

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