XRP News Today: Ripple’s Stablecoin Move and SEC Appeal Speculation Impact XRP Forecast

RP Moves Sideways Amid SEC vs. Ripple Appeal Speculation

On Friday, August 16, XRP gained 0.61%, partially reversing a 1.41% loss, to close at $0.5644. The broader crypto market advanced by 1.42% to a total market cap of $2.028 trillion.

SEC vs. Ripple: Chief Legal Officer Expects an Appeal

On August 7, Ripple declared a victory after the final judgment in the SEC vs. Ripple case. Judge Torres ordered Ripple to pay $125 million for breaching section 5 of the US Securities Act. Additionally, Judge Torres tasked Ripple with complying to US securities laws going forward.

The SEC wanted a more punitive final judgment, including a $2 billion penalty and an injunction prohibiting XRP sales to institutional investors.

Speculation continues regarding whether the SEC will appeal.

On Thursday, Ripple Chief Legal Officer Stuart Alderoty discussed the Ripple case in an interview with CryptoLaw, saying,

“If the SEC were a rational actor, they should just move on from this case. […]. But we all know that, when it comes to crypto, the SEC has proven itself not to be rational. […] So, I wouldn’t be surprised if the SEC does appeal.”

A harsher penalty on appeal could adversely affect XRP demand and Ripple’s US expansion plans if Judge Torres deems XRP sales via ODL agreements as securities law violations.

Ripple and the SEC have 60 days from the final judgment to file appeals.

Stablecoins in Focus

Jack McDonald, SVP of Stablecoins at Ripple, delivered a 60-second definition of stablecoins as Ripple continues testing its stablecoin, RL USD,

“Stablecoins, as the name implies, are digital tokens that are designed to less volatile than other types of cryptocurrencies or digital assets. There are different types of stablecoins. Some are backed by other cryptocurrencies and are going to be inherently more volatile while others are designed to be more stable and those are the ones that are really backed by government-backed securities or sovereign-backed securities.”

Jack McDonald added,

“So let’s think about a US dollar or euro or a Japanese Yen. You give me a dollar or a euro, I give you a digital token representing that dollar or euro. […] You can invest with it, you can save it, you can use it as a store of value. And at the end of the day, when you want that dollar or euro back, you give me the token, I give you the euro. You have the confidence that it’s stable, it’s retained its value, and it has the same value on the way out as it did on the way in. That’s why stablecoins are stable.”

Ripple’s Stablecoin: Ripple USD

On August 9, Ripple announced the private beta launch of Ripple USD (RL USD) on the XRP Ledger and Ethereum mainnet. Notably, Ripple stated that RL USD had not yet received regulatory approval. RL USD will be valued 1:1 to the US dollar and 100% backed by US dollar deposits, short-term US government treasuries, and other cash equivalents.

Based on Jack McDonald’s definition of stablecoins, investors cannot expect profits if the value on the way out will be the same as the value on the way in. Yet the SEC targeted Ripple’s plans to launch a stablecoin in April 2024, labeling it as the issuance of a new unregistered crypto asset. This is despite dollar-backed stablecoins likely to fail Howey’s third prong, the expectation of profit through the effort of others.

The SEC’s April 2024 filing could be the reason for Ripple advising it had not yet received regulatory approval. The final judgment ordered Ripple to act within the boundaries of US securities laws.

Will the SEC approve RL USD?

Disapproving RL USD could trigger another legal battle between Ripple and the SEC. However, the assets backing RL USD may undermine the SEC’s argument, possibly boosting XRP demand. Ripple is targeting the US cross-border payment industry, from which it has been largely absent since the SEC’s charges in December 2020.

What the Experts Say

FXCintelligence, a leading provider of cross-border payments data and intelligence, commented on Ripple’s plans for the US market, saying,

“As it faces the prospect of a post-lawsuit future, Ripple has already begun to re-engage with the cross-border payments industry, particularly in the US where only 10% of its business is located at present. The company currently has a very small share of flows in the global cross-border payments market, which overall totaled $190.1tn in 2023.”

XRP Price Action

Daily Chart

XRP sat above the 50-day and 200-day EMAs, affirming the bullish price signals.

A break above the $0.5739 resistance level would support a move toward $0.60. Furthermore, a breakout from $0.60 could give the bulls a run at the $0.6609 resistance level.

SEC vs. crypto case-related updates and RL USD-related news require consideration.

Conversely, a drop below the 50-day and 200-day EMAs could bring the $0.50 handle into play. A fall through $0.50 may give the bears a run at the top trend line.

With a 14-day RSI reading of 49.64, XRP could fall to $0.50 before entering oversold territory.