Ripple IPO: What does XRP have to do with it and what are the chances?

Ripple IPO – What Does XRP Have to Do With It and What Are the Chances?

Ripple is reportedly considering a stock market debut, which is a typical step to raise additional capital and allow early investors to divest. In Ripple’s case, however, an IPO is primarily observed through the lens of XRP.

Ripple IPO Depending on SEC Victory?

To understand the possible connections between Ripple and a planned IPO, it’s worth looking back at a statement made by CEO Brad Garlinghouse in May 2020: Garlinghouse, at that time, openly expressed the desire to go public with Ripple. However, the announcement was followed by a lawsuit from the US Securities and Exchange Commission in December 2020. The SEC accused Ripple of selling XRP illegally as a security. The litigation ended in July 2023 with a partial success for Ripple, but some arguments from the SEC are still pending an appeal. It is therefore conceivable that Ripple would await a legally binding outcome before pursuing an IPO.

How Does XRP Play Into Ripple’s Success?

Since 2013, Ripple has tied its flagship product for international money transfers, ODL, to the use of XRP. As a result, Ripple’s success fundamentally also depends on XRP. Moreover, Ripple is the largest single owner of XRP, owning about half of the approximately 100 billion XRP. This allows Ripple to sell XRP directly if they need capital influx. From this perspective, it makes sense that Ripple would strategically proceed with an IPO when the XRP price is experiencing an upward trend.

Conclusion: Sticking Point SEC?

Should Ripple aim for an IPO, the show will certainly focus on whether Ripple will get off freely with its history of XRP. A US federal court found in July 2023 that XRP deserves special regulation regarding sales to private investors. For Ripple, a legally binding ruling in its favor would mean certainty for the regulatory future of XRP. The possibility of generating additional capital would then no longer be marred by legal uncertainties.

In the medium term, Ripple’s IPO is thus not only about a success for itself but also about the future prospects of XRP. Observers agree that a positive legal outcome and favorable market conditions would likely result in a market debut. Until then, XRP investors still have to be patient.