XRP News: New Proposal Seeks SEC Settlement by Classifying XRP as a Payment Network

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The global financial landscape is undergoing a digital transformation, and cryptocurrencies are at the heart of this evolution. Among them, XRP has reemerged as a pivotal player—especially in light of a recent proposal aimed at resolving its long-standing regulatory uncertainty in the United States. On March 14, Maximilian Staudinger submitted a comprehensive plan to the U.S. Securities and Exchange Commission (SEC) advocating for the reclassification of XRP not as a security, but as a foundational component of a modernized U.S. payment network.

This bold initiative could redefine how America handles cross-border transactions, unlock trillions in dormant capital, and position the nation as a leader in blockchain-based finance.

Unlocking Trillions in Dormant Banking Capital

One of the most compelling arguments in Staudinger’s proposal centers around Nostro accounts—correspondent banking accounts that institutions maintain abroad to facilitate international payments. In the U.S. financial system, these accounts hold an estimated $5 trillion in liquidity. However, much of this capital sits idle due to the inefficiencies of legacy systems like SWIFT.

By integrating XRP into the settlement layer, banks could reduce settlement times from days to seconds and free up approximately 30% of that $5 trillion**—amounting to **$1.5 trillion in newly available capital. This liberated liquidity could then be reinvested into infrastructure, innovation, or even strategic digital asset reserves.

👉 Discover how next-gen payment solutions are transforming global finance.

Beyond capital efficiency, the proposal estimates annual savings of $7.5 billion in transaction fees across the U.S. banking sector. These cost reductions would ripple through the economy, lowering operational burdens for financial institutions and potentially translating into better services for consumers.

Legal Reclassification: The Key to XRP’s Future

For XRP to fulfill its potential, regulatory clarity is non-negotiable. The ongoing legal battle between Ripple Labs and the SEC has cast a shadow over XRP’s status since 2020. Staudinger’s proposal directly addresses this by urging the SEC to reclassify XRP as a payment network token, rather than a security.

This reclassification would align with recent court rulings that distinguished between institutional sales of XRP (which may fall under securities law) and open-market trading (which does not). By formally recognizing XRP’s role as a utility within a decentralized payments ecosystem, regulators could pave the way for widespread institutional adoption.

Additionally, the proposal calls on the Department of Justice (DOJ) to lift any implicit or explicit restrictions preventing banks from utilizing XRP for real-time settlements. Removing these barriers would empower financial institutions to innovate without fear of regulatory backlash.

A 24-Month Roadmap to Financial Modernization

Staudinger outlines a clear, phased implementation strategy spanning 24 months:

  1. Months 1–3: Secure legal clearance for XRP through administrative action or executive order.
  2. Months 4–6: Launch a Treasury-backed pilot program testing XRP in federal disbursements—such as tax refunds and Social Security payments.
  3. Months 7–18: Enable progressive integration of XRP into major banking networks for cross-border and domestic settlements.
  4. Months 19–24: Begin accumulating a national Bitcoin reserve using a portion of the capital freed by XRP-driven efficiencies.

This structured rollout minimizes risk while maximizing impact, ensuring that each phase builds trust and demonstrates tangible benefits.

👉 See how blockchain innovation is reshaping national economies.

Accelerating Adoption Through Executive Action

Recognizing the urgency of financial modernization, the proposal suggests leveraging a Presidential Executive Order to fast-track regulatory approval within 1–3 months. Such high-level intervention could bypass bureaucratic delays and send a strong signal about America’s commitment to digital finance leadership.

With streamlined oversight, a government pilot using XRP for public payments could launch within months. Full-scale bank adoption could follow in under a year—remarkably fast for systemic financial change.

Economic Impact: Beyond Cost Savings

The implications extend far beyond immediate cost reductions. The proposal projects that optimized federal payment systems—powered by XRP—could save $500 billion over 10 years in administrative and transactional expenses related to IRS disbursements, Social Security, and other large-scale transfers.

Moreover, reinvesting freed capital into a national Bitcoin reserve would strengthen U.S. balance sheets against inflation and currency devaluation. It also positions the U.S. to compete with countries like China, which are advancing their own digital currencies (e.g., the digital yuan).

Unlike speculative crypto assets, XRP is designed specifically for fast, low-cost, scalable transactions—making it ideal for high-volume institutional use. While blockchains like Solana and Cardano offer smart contract capabilities useful for government applications, XRP’s core strength lies in payments infrastructure.

XRP vs. Other Cryptocurrencies: A Strategic Division of Roles

The proposal envisions a diversified yet purpose-driven approach to digital assets:

This tiered model ensures that each technology is used where it performs best—avoiding redundancy and maximizing efficiency.

👉 Explore how strategic crypto integration can boost national economic resilience.

Frequently Asked Questions (FAQ)

Q: Why should XRP be classified as a payment network instead of a security?
A: XRP operates on a decentralized ledger designed specifically for fast, low-cost transactions. Its primary function is utility—not investment—and courts have already recognized distinctions between direct sales and open-market trading.

Q: Can XRP really save $7.5 billion annually for U.S. banks?
A: Yes. By replacing slow, fee-heavy systems like SWIFT with near-instant XRP settlements, banks eliminate intermediary costs and reduce liquidity lockup—translating into measurable savings at scale.

Q: How would a national Bitcoin reserve work?
A: A portion of the $1.5 trillion in freed-up capital could be allocated to purchase Bitcoin, creating a strategic digital asset reserve similar to gold holdings—enhancing financial stability and sovereignty.

Q: Is this proposal officially backed by the U.S. government?
A: As of now, it is an independent policy recommendation submitted to regulators. However, its alignment with broader financial modernization goals makes it a credible starting point for discussion.

Q: Could using XRP compromise financial security or privacy?
A: No. The proposed implementation focuses on permissioned access and compliance with existing AML/KYC frameworks. Security would remain a top priority throughout deployment.

Q: What happens if the SEC rejects the reclassification?
A: Continued uncertainty would delay innovation and keep trillions in capital inefficiently deployed. Proactive executive or legislative action may become necessary to advance national interests.

Core Keywords:

With growing momentum behind digital asset integration, the time is ripe for bold reforms. Staudinger’s proposal offers a pragmatic, economically sound path forward—one where XRP becomes not just a cryptocurrency, but a cornerstone of America’s next-generation financial infrastructure.