Ripple Can Now Offer Ripple Payments (ODL) Services in US

Ripple could be gearing up to offer its Ripple Payments (formerly ODL) services in the United States by leveraging U.S.-based exchange Uphold for XRP sales in the country.

The host of Digital Assets Daily, a crypto YouTube channel, called attention to this tactic in a recent post. His remarks built on a comment from an XRP community member who hinted that Ripple’s recent partnership with Uphold aimed to solve its dilemma with Ripple Payments sales in the U.S.

Exactly Right. XRP sales through @Ripple solved through sales at @UpholdInc following now clarified legal guidelines of ‘Ripple Payments’ (Formerly ODL) to ensure US capable regulatory clarity to now ‘Go Live’ in the US Markets! https://t.co/E8393J5AYs

— Digital Assets Daily (@AssetsDaily) October 24, 2023

The Ripple-Uphold Partnership 

Recall that Ripple recently inked a strategic partnership with Uphold, as The Crypto Basic reported yesterday. According to the announcement, the partnership would see Ripple utilize Uphold’s trading infrastructure, which boasts 30 trading venues, to bolster its cross-border payment service.

Though reports of the partnership triggered moderate excitement in the XRP community, several community members failed to understand the gravity of its implications. The latest comments aim to highlight how pivotal the strategic partnership could be.

Ripple Exempts the US in ODL Sales

Notably, the Ripple Payments service (formerly On-Demand Liquidity) is not live in the U.S. despite Ripple offering these services to over 55 countries with a payout network spanning 70 markets. 

Meanwhile, following the July 13 judgment on the Ripple vs. SEC lawsuit, Leonidas, an XRP community figure, asked if the court’s ruling deemed sales involving ODL securities. Recall that the court declared that Ripple’s past XRP sales to institutional investors violated securities laws.

In response to Leonidas’ question, Ripple’s CTO David Schwartz disclosed that Ripple was still “figuring it out.” He pointed out that the company does not currently offer ODL sales in the U.S. However, he stressed that, if they wanted to, Ripple could still offer ODL in the U.S., but the XRP would come from another source, not Ripple itself.

A Solution to the Dilemma

The latest comment from the host of Digital Assets Daily emphasizes that Ripple now seeks to use Uphold as an avenue for ODL sales in the U.S. By using this technique, the company would avoid any potential regulatory action for the U.S.-based ODL sales.

Notably, in ODL (now Ripple Payments), crypto exchanges play a pivotal role. These exchanges purchase XRP and sell the XRP tokens to financial institutions that use the ODL service. These financial institutions then leverage the XRP as a bridge currency to convert one fiat currency to another.

As a result of the Ripple-Uphold partnership, Uphold will function as one of these exchanges. The platform will provide XRP liquidity for ODL transactions involving institutions in the U.S. These tokens would not be coming from Ripple.

Uphold confirmed this in a recent follow-up post to the announcement. An XRP community figure asked if Uphold would use customers’ XRP tokens to provide this liquidity. Uphold currently holds $1.27 billion worth of XRP in its reserves, reflecting customers’ balance.

Hi James & thanks! We never leverage customer funds. They're not ours..

We will, however, be using our expertise in sourcing both fiat and crypto (XRP included) on the open market, in order to facilitate the near instantaneous transfer of money across borders via Ripple ODL.

— Uphold (@UpholdInc) October 24, 2023

However, in its reply, Uphold emphasized that it would not use its customers’ XRP holdings to provide liquidity. The platform noted that it would purchase XRP and other assets in the open market for facilitating these ODL sales.