San Francisco based blockchain company Ripple secures Singapore licence for in-principle payments which acts as a preliminary regulatory approval to operate in Singapore. It provides a glimmer of hope for the global cryptocurrency industry amid tightening policies in the United States. The Monetary Authority of Singapore (MAS), the country’s central bank and integrated financial regulator, which also works with the financial industry to develop Singapore as a dynamic international financial centre, has granted Ripple an in-principle approval for a Major Payment Institution Licence.
The license is significant as it enables Ripple to offer regulated digital payment token products and services, facilitating the expansion of cross-border transfers involving XRP, a cryptocurrency associated with the company. Ripple primarily focuses on XRP and utilizes blockchain technology to provide interbank messaging services. The distributed ledger technology that underpins many cryptocurrencies enables faster processing of cross-border transactions compared to traditional payment systems.
Ripple’s on-demand liquidity (ODL) service utilizes XRP as a “bridge” between currencies. This innovative approach allows payment providers and banks to expedite cross-border transactions, leveraging the speed and efficiency of blockchain technology. Additionally, Ripple operates RippleNet, a blockchain-based international messaging system akin to the global interbank messaging system SWIFT. RippleNet functions as a decentralized network connecting banks, financial institutions, and payment providers worldwide.
The company reports an unprecedented surge in business momentum, with approximately 60% of global payments processed over RippleNet employing on-demand liquidity (ODL) in 2022. ODL serves as Ripple’s flagship product, enabling businesses to settle cross-border transactions instantly using the XRP token. Ripple experienced remarkable growth in ODL volume flowing through Singapore, surpassing a five-fold increase compared to the previous year.
Recognising Singapore’s status as a leading global financial centre and a prominent gateway to the Asia-Pacific business landscape, Ripple’s CEO, Brad Garlinghouse, expressed his appreciation for the in-principle approval, commenting “Singapore is a leading global financial centre, and a prominent gateway to business in Asia-Pacific”. He further emphasised Ripple’s commitment to the region.
The expansion in Singapore coincides with increased regulatory scrutiny and a crackdown on the cryptocurrency sector in the United States, prompting many companies to diversify their operations beyond the country’s borders.
Notably, Ripple is currently embroiled in a legal battle with the U.S. Securities and Exchange Commission (SEC) which also recently filed lawsuits against two major crypto players, Coinbase and Binance.
The SEC has accused Ripple, co-founder Christian Larsen, and CEO Brad Garlinghouse of conducting an illegal securities offering that raised over $1.3 billion through the sale of XRP. However, Ripple vehemently denies these allegations, asserting that XRP is a currency and not a security subject to stringent regulations.
To bolster its presence in Singapore, Ripple has doubled its headcount over the past year, expanding key functions such as business development, compliance, and finance. Singapore has established itself as a fintech and crypto-friendly jurisdiction, attracting major companies like domestic banking giant DBS, British fintech firm Revolut, and Singapore-based crypto exchange Crypto.com.
In an effort to engage in discussions surrounding digital asset innovation and prudent regulation, Brad Garlinghouse, Ripple’s CEO, is scheduled to speak at the Point Zero Forum in Zurich, Switzerland. This event follows Ripple’s acquisition of Metaco, a crypto custody services firm, for $250 million. The purchase aims to enhance Ripple’s presence in the Swiss market and diversify its operations away from the United States. Ripple expects its legal battle with the SEC to result in over $200 million in legal fees.
Ripple’s in-principle regulatory approval in Singapore signifies a positive step for the cryptocurrency industry amid the challenging regulatory environment. The company’s expansion in Singapore and acquisition in Switzerland demonstrate its determination to navigate the evolving landscape and further develop its global presence. As cryptocurrencies continue to garner attention and scrutiny, Ripple’s focus on compliance and regulated services positions it as a key player in facilitating secure and efficient cross-border transactions.
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