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Ripple Expands: What Planned Acquisition of Standard Custody Could Mean for XRP

Last Updated February 19, 2024 3:03 PM
Teuta Franjkovic
Last Updated February 19, 2024 3:03 PM

Key Takeaways

  • Ripple buys New York trust charter, expanding US business beyond payments.
  • Second custody acquisition awaits regulatory approval, aiming for wider services.
  • Move signals ambition to break free from just being a payments network.

Ripple recently announced its acquisition of Standard Custody & Trust, as part of its strategy to obtain a New York trust charter and further its expansion of US regulatory licensing.

This move signifies Ripple’s continued efforts to enhance its regulatory framework within the United States.

Expands US Presence with Strategic Acquisition

In the midst of an intense legal battle with the United States Securities and Exchange Commission (SEC), where Ripple has largely prevailed, the global payments company is actively seeking to broaden its operational scope within the U.S.

By acquiring a company that holds a limited purpose trust charter in New York, Ripple aims to enhance its service offerings. As a result, it will start assisting financial firms in asset tokenization. This move is part of Ripple’s effort to diversify beyond its established payments network. This will mean it venturing into additional financial products that leverage blockchain technology for the benefit of its institutional clients.

Ripple President Monica Long expressed the company’s intention to expand its infrastructure offerings to financial institutions. She said she viewed this strategy as a way to significantly increase operational flexibility.

Long told CoinDesk it was a long-term project. She also mentioned that Ripple iswascontinuing its efforts to secure the remaining US money transmission licenses needed for its operations.

Expanding Services with Standard Custody & Trust Acquisition

The terms of Ripple’s agreement to acquire Standard Custody & Trust remain undisclosed. They are also pending approval from the New York Department of Financial Services. Nevertheless, they represent a significant expansion for Ripple by incorporating a crypto custody and settlement business.

This addition will let Ripple offer its customers in-house custody services. This, in turn, will remove the need for external partners for such purposes. While Ripple is recognized for its legal confrontation with the SEC in the US, concerning allegations of XRP being a security, the company has so far seen favorable court outcomes.

However, according to Monica Long, Ripple’s concerns in the US stem more from the broader regulatory uncertainties surrounding digital assets than the dispute with the SEC alone. Despite these challenges, Long believes in the potential for the U.S. to lead in fostering innovation within the digital asset space. This move follows Ripple’s previous acquisition of another cryptocurrency custody firm, Metaco, last year, underscoring Ripple’s commitment to expanding its service offerings in the U.S. market.

Strategic Expansion

Ripple’s strategic efforts to expand its presence in the US have been demonstrated by its acquisition of cryptocurrency custody firm Metaco among others. These moves could well reflect a commitment to adhering to regulatory standards.

This strategy aims to enhance Ripple’s suite of services, reinforcing its role in helping integrate blockchain technology within the financial sector. It aims to give digital asset transactions enhanced security, transparency, and accessibility.

Ripple acquisition

Ripple’s Acquisition of Standard Custody Spurs XRP Market Turnaround

From January 23 to February 12, XRP experienced a subdued performance . During that time, there was only an 8% increase in price, lagging behind the broader market. Yet, this trend saw a notable shift following the acquisition.

The acquisition is set to empower Ripple by utilizing Standard Custody’s money transmitter licenses, aiming to bolster compliance and provide greater regulatory clarity in its operations. This strategic move has, so far, injected newfound momentum into XRP. This move has underscore Ripple’s commitment to enhancing its regulatory framework and service offerings in the digital asset space.

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