Uphold to Buy XRP on Open Market, Promises Not to Use Customer Funds for ODL (Ripple Payments)
U.S.-based trading platform Uphold disclosed plans to purchase XRP on the open market for its ODL (now Ripple Payments) transactions, with a promise to not leverage customer deposits.
Uphold disclosed this in a recent reply to a customer’s inquiry following their partnership with Ripple. Recall that Uphold and Ripple inked a strategic partnership, as recently reported by The Crypto Basic.
Significance of the Ripple Partnership
The partnership would see Ripple leverage Uphold’s trading platform for its Ripple Payments [formerly On-Demand Liquidity (ODL)] offering in the United States. Ripple had desisted from offering Ripple Payments in the U.S. due to regulatory concerns.
For the uninitiated, ODL is a payment solution that uses XRP to enable real-time, cross-border transfers. It works by converting one currency into XRP, sending XRP across borders, and then converting it back into the destination currency, all within seconds.
David Schwartz, in a previous comment, noted that the San Francisco-based company does not provide ODL services with a U.S. nexus. However, he disclosed that they could toe that path without any legal repercussions, supposing the XRP does not come directly from them.
Uphold to Buy XRP from the Open Market
Interestingly, the partnership with Uphold would see the firm achieve this goal. However, much like how ODL operates, Uphold would need to purchase XRP to use it as a bridge currency for ODL transactions.
To gain insight into how Uphold plans to source these XRP tokens, an Uphold customer and a Texas-based XRP community figure asked the trading platform if customers’ XRP deposits would work to provide liquidity for ODL transactions.
In response, Uphold confirmed that it would not be leveraging customers’ deposits. It bears mentioning that XRP makes up Uphold’s largest crypto holding, amounting to $1.25 billion worth of the token in customer funds. For context, customers only hold $168 million worth of Bitcoin (BTC) on Uphold.
https://thecryptobasic.com/2023/10/28/uphold-to-buy-xrp-on-open-market-promises-not-to-use-customer-funds-for-odl-ripple-payments