Ripple Labs — the fintech company focused on offering cheaper international payments through cryptocurrency and decentralized ledger technology — continues to secure key partnerships, expanding the use of the XRP cryptocurrency.
Case in point: the company this week announced a new partnership with European money transfer business Azimo that will see the remittance firm leverage Ripple’s flagship product.
Ripple Teams Up With European Remittance Firm
Announced in a blog post published Wednesday, Ripple’s partnership with Azimo will see the latter company use On-Demand Liquidity (ODL) as a “part of its remittance capabilities into The Philippines,” with plans to expand the use of the solution in the future.
ODL, for those unaware, is a solution that uses XRP “to bridge two currencies within seconds,” purportedly decreasing the time and cost of an international, cross-currency money transfer, for both banks and transactors. As Ripple further explained in the post:
ODL has the potential to reduce liquidity costs by up to 60% compared to traditional banking solutions, guaranteeing some of the most competitive FX rates available.
Ripple sees this partnership as essential; data from The World Bank suggests that The Philippines is one of the world’s biggest remittance corridors, ” averaging $34 billion remittance flows in 2018.” Azimo’s utilization of ODL, the company wrote, offers remitters with a “better solution to send money into this region.”
Azimo agreed with this assessment, with company CEO Richard Ambrose saying in a press comment that ODL “as significantly reduced the cost and delivery time for cross-border transfers,” improving the wellbeing of their customers as a result.
This is Ripple’s latest partnership in a string of many, with the company, for instance, securing a business relationship with one of Thailand’s oldest banks, Siam Commercial Bank, earlier this year.
Despite a Growing Business, Ripple is Facing Trouble In Court
While Ripple has been making progress on bolstering the adoption of its fintech products, the upstart recently ran into an issue in court, with a federal judge recently ruling that a class-action lawsuit levied against the company will continue forward. This comes after Ripple attempted to get the case thrown out as they claim it has been years since the relevant issue has been, well, relevant.
The class, which began this legal pursuit over a year ago, accuses Ripple of distributing unregistered securities (meaning XRP) by leveraging questionable advertising.
In the same ruling, the judge dismissed claims from the class that the fintech startup had made false statements under California law, which lies at the heart of the argument, though the court is giving the plaintiffs another chance to prove wrongdoing in a future complaint.
It isn’t exactly clear how much Ripple stands to lose from a monetary perspective, though the company previously stated that the case moving forward has the potential to “upend and threaten to destroy the established XRP market more broadly,” per Bloomberg.
Not to mention, a prominent industry lawyer has suggested this class-action lawsuit will likely delay the company’s attempts at selling its shares on public exchanges via an initial public offering.
The lawyer, Jake Chervinsky of Ethereum finance application Compound, said that the persistence of this case will likely force the U.S. Securities and Exchange Commission (SEC) to sit on the sidelines in terms of making a decision whether or not XRP is a security.
In turn, this uncertainty regarding XRP’s regulatory status is likely to delay Ripple from moving forward with selling shares on the stock market. As Chervinsky once explained:
I doubt [an IPO will] happen while XRP’s security status remains uncertain. That’s not FUD, it’s basic business sense.”
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