Why Ripple Decided to Replace XRP with USDT for U.S. Clients

Ripple’s legal battle with the SEC has forced them to switch from XRP to stablecoin USDT for US-based ODL transactions.

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  • Ripple’s core business has been changing due to a legal battle with the SEC.
  • In order to comply with what they believe is the law, Ripple has switched to USDT.
  • A court filing has revealed Ripple’s dependence on XRP sales for profits prior to the SEC lawsuit.

The ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) has triggered a significant change in Ripple’s core business operations within the United States. A recent court filing revealed that Ripple’s On-Demand Liquidity (ODL) service is no longer utilizing XRP for U.S.-based transactions.

Ripple Shifts ODL Operations

This strategic shift stems from the SEC lawsuit, which alleges that XRP is a security and its sales violated U.S. regulations. While the case is ongoing, the court’s summary judgment deemed XRP sales to institutions as securities offerings. 


This led Ripple to adjust its ODL operations to comply with the perceived legal landscape. According to the filing, Ripple has transitioned U.S.-based ODL customers from XRP to Tether (USDT), a stablecoin pegged to the U.S. dollar. 

This move ensures ODL remains compliant within the U.S. while minimizing disruption for its global customer base. An internal email from Monica Long, Ripple’s president, further clarifies the company’s actions. Following the SEC’s ruling, Ripple swiftly migrated all U.S.-based ODL users away from XRP and adopted USDT (or, in some cases, Bitcoin) as the bridge currency. 

The email emphasizes the continued use of vetted stablecoins for U.S. transactions unless otherwise authorized by the legal department. This strategic decision allows Ripple to maintain its ODL service within the US while navigating the legal complexities surrounding XRP. 

Ripple Focuses on International Markets

Meanwhile, Ripple’s Singapore subsidiaries remain the primary contracting entities for XRP sales to new ODL customers, particularly those located outside the United States. This geographical shift underscores Ripple’s focus on international markets, where ODL transactions primarily occur, especially within the Asia-Pacific region.


The court filing also sheds light on Ripple’s financial dependence on XRP sales prior to the SEC lawsuit. Accounting expert Anthony Bracco’s calculations reveal that without revenue from XRP sales, Ripple operated at a loss from 2014 to December 2020. This detail highlights the significant financial contribution of XRP sales to Ripple’s overall business during that period.

The ongoing SEC lawsuit has undoubtedly reshaped Ripple’s operational landscape. The company’s strategic shift to stablecoins for U.S.-based ODL transactions demonstrates its commitment to compliance while safeguarding its global business interests. 

On the Flipside

  • While XRP is no longer used for U.S.-based ODL transactions, it remains the primary liquidity source for ODL transactions outside the United States.
  • Ripple’s shift to stablecoins might be a strategic maneuver to navigate the lawsuit, not necessarily an admission of XRP being a security.
  • To mitigate reliance on third-party stablecoins, Ripple is creating its own digital currency pegged to the U.S. dollar.

Why This Matters

Ripple’s shift to stablecoins for U.S. transactions highlights the ongoing regulatory uncertainty surrounding XRP. Additionally, Ripple’s development of its own stablecoin suggests a potential strategy to navigate future regulations and seamlessly integrate a Ripple-backed stablecoin into the ODL ecosystem, especially in the United States.

While the recent Coinbase ruling casts a shadow over Ripple’s case against the SEC, some experts believe altcoins could see significant gains. Find out why in this article:
Coinbase’s Ruling May Send Ripple vs SEC Case to Supreme Court

The Coinbase case may send Ripple’s lawsuit against the SEC to the Supreme Court. But how will this affect the ongoing case itself? This article dives in:
Ripple CLO: “No Pre-Trial Conference” – Is the Case Affected?

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Kyle Calvert

Kyle Calvert is a cryptocurrency news reporter for DailyCoin, specializing in Ripple, stablecoins, as well as price and market analysis news. Before his current role, Kyle worked as a student researcher in the cryptocurrency industry, gaining an understanding of how digital currencies work, their potential uses, and their impact on the economy and society. He completed his Masters and Honors degrees in Blockchain Technology within Esports and Business and Event management within Esports at Staffordshire University.