US Congress Challenges Ripple’s Victory Amid CBDC Pilot Launch

US Congress Challenges Ripple's Victory Amid CBDC Pilot Launch

A trending video showcasing Massachusetts Representative Stephen Lynch’s unwavering support for the U.S. Securities and Exchange Commission (SEC) has sparked controversy within the crypto community.

Lynch defended the SEC’s actions against Ripple Labs Inc., suggesting that the regulatory body had come out on top in the much-publicized legal dispute. Dismissing claims of a heavy-handed approach to regulation in the cryptocurrency space, Lynch asserted that such businesses were not being unfairly targeted but were subject to existing rules. Lynch argued that contrary to the narrative painting the SEC as a draconian regulator, the Commission simply applied existing regulations to a new domain.

Under the stewardship of Gary Gensler, the SEC has pursued a series of actions against cryptocurrency businesses, achieving a strong track record of success. According to Lynch, of the 131 cases the SEC has filed against crypto companies, almost all have resulted in favourable outcomes for the regulator. Lynch’s remarks strongly endorse the SEC’s work and a rebuttal of allegations that the SEC was unfairly targeting the crypto industry.

The crypto community’s response

Representative Lynch’s public support of the SEC’s actions has been met with a strong response from the cryptocurrency community. High-profile crypto lawyer and fervent XRP supporter John Deaton spoke out against Lynch’s claims. Deaton, representing a sizeable contingent of XRP holders and Coinbase users, emphasized the importance of truth and accuracy in the ongoing legal discourse.  

Deaton used the platform to call for a bipartisan approach to cryptocurrency regulation. He claimed his diverse client base, consisting of 75,000 XRP investors, spanned a broad political spectrum, highlighting the need for cross-party consensus on crypto regulation. Deaton emphasized the long-term implications of decisions made in the present, asserting that the evolving landscape of cryptocurrency requires prudent and fair regulatory decisions.

Contradicting Lynch’s assertion, it’s important to note that XRP was deemed not a security. According to experts, this underscores the urgent need for a definitive and fair regulatory framework that can keep up with the fast-paced evolution of cryptocurrencies.

Meanwhile, Ripple’s chief legal officer, Stuart Alderoty, remains optimistic about Ripple’s legal stance. He downplayed the threat of an SEC appeal, suggesting that an appeal could bolster Ripple’s partial win. Alderoty’s confidence indicates a strong belief in Ripple’s legal standing and the potential for further victories in the ongoing legal dispute.

Ripple expands with Palau stablecoin pilot

In parallel with the ongoing legal tussle, Ripple is making strides elsewhere. It has partnered with the Republic of Palau to launch a limited stablecoin pilot. The collaborative venture, initiated in 2021, plans to issue a U.S. Dollar-backed stablecoin, Palau Stablecoin (PSC), on the XRP Ledger. This blockchain platform, known for its carbon-neutral attributes, offers enhanced security and privacy for transactions.

Under this pilot, Palau will use Ripple’s Central Bank Digital Currency (CBDC) platform to create a digital version of the U.S. Dollar, Palau’s official currency.

Market update on XRP

In the wake of Ripple’s partial court victory, interest in XRP continues to grow. As Kaiko, a digital asset market data provider, reported, there’s above-average interest in XRP futures trading across major exchanges. Similarly, recent figures from CoinMarketCap show that XRP is on an upward trajectory, with a 2.23% increase in its token price, as of writing. XRP was exchanging hands for $0.7174 at 08:00 UTC on Friday, July 28. These positive indicators testify to the continued investor interest in XRP despite the ongoing legal proceedings.

Image credits: Shutterstock, CC images, Midjourney, Unsplash.