Reports Reveal Ripple Purchased Bitstamp Shares In Q1 2023; But Why?
Ripple News: Ripple Labs is paving an expansion route outside the United States due to unclear regulations around digital asset trading. Amid facing legal challenges from the U.S. SEC, Ripple reportedly purchased Bitstamp, a Europe based crypto exchange’s shares held by Pantera Capital.
Also Read: SEC Staff Emails Reveal XRP Failed Howey Test
Ripple Strengthen Its Foothold In Europe
Galaxy Digital’s First Quarter 2023 Shareholder Update Conference Call report depicts that it advised Pantera to sell its stake in Bitstamp to Ripple Labs. However, this deal came after FTX led collapse of the global cryptocurrency market. However, the sale here is not mentioned as the acquisition deal in the report.
A vital question emerging here will be why Ripple moved ahead with the deal. It is expected that this is not just a simple financial deal, but it could be a move to build its Liquidity Hub (LH) or On Demand Liquidity (ODL).
It is important to note that Ripple’s LH service doesn’t include its native crypto, XRP, while its ODL transactions are settled in XRP. Read More XRP News Here…
Expansion Of ODL Service?
Stuart Alderoty, Ripple’s Chief Legal Officer has stated that its new product LH is an institutional product and not for retail. He mentioned that there is little liquidity for XRP in the US due to ongoing regulatory challenges. However, the blockchain firm is keen to back XRP in LH where it is required.
Ripple has clearly stated that the Liquidity Hub was built to approach all kinds of digital asset liquidity. While On demand liquidity has been in use for years with XRP.
However, Bitstamp initially support 3 fiat currencies USD, EUR, and GBP. Ripple’s ODL uses XRP token in cross border payments. The token acts as a bridge between two fiat currencies which makes transactions fast. The blockchain firm’s ODL has gradually opened the payment hallway in several countries. This includes Europe, Japan, Australia, and more.
It is crucial to see what would be Bitstamp’s role in expanding Ripple’s ecosystem in the continent. It might include and boost XRP liquidity.
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