Attorney Bill Morgan has uncovered significant details about Ripple’s On-Demand Liquidity (ODL) system from a recent Securities and Exchange Commission (SEC) filing by Currency Group dated March 6.
The filing provides an analysis of financial risks and examines how the 2023 banking crisis affected XRP transactions processed through Tranglo, a key Ripple partner in Southeast Asia.
This was information I was not aware of from the form S-1 registration statement and prospectus filed by Currenc Group on 6 March 2025 which describes itself as one of the leading operators of global money transfers in Southeast Asia and which operates a remittance business… pic.twitter.com/izJWqFsBs3
— bill morgan (@Belisarius2020) March 17, 2025
Banking Challenges and Their Effect on ODL
The collapse of major financial institutions, including Silicon Valley Bank, Signature Bank, and Silvergate Bank in 2023, created substantial liquidity issues for Tranglo. These banks played a critical role in providing cash flow for cryptocurrency exchanges, and their failure disrupted XRP-based transactions.
According to the SEC filing, Tranglo faced difficulties when two partner exchanges, Independent Reserve and Coins.ph, experienced delays in converting XRP to local currencies. The liquidity shortage forced Tranglo to request that its ODL partners temporarily suspend XRP-based transactions. As a result, nine out of eleven ODL partners reverted to traditional fiat pre-funding methods to maintain operations.
The document underscores a key vulnerability in cryptocurrency-based liquidity systems. While digital assets can offer numerous advantages, their effectiveness depends on stable banking relationships and sufficient liquidity.
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XRP’s Role in Tranglo’s Cross-Border Payments
The SEC filing provides one of the most detailed explanations of Tranglo’s ODL system. Morgan drew attention to pages 82 through 85, which describe how XRP is used within Tranglo’s network for international transactions. A diagram in the document confirms that XRP remains a core component of Tranglo’s operational framework.
Ripple’s ODL technology was designed to eliminate the need for pre-funded accounts by using XRP as a bridge currency, reducing transaction costs and settlement times. However, the disruptions caused by the banking crisis revealed potential weaknesses in this system when liquidity constraints arise.
The filing clarifies that XRP is a settlement asset within the ODL framework but is significantly affected by market liquidity and stable exchange relationships. During financial instability, these dependencies can temporarily limit ODL’s efficiency.
The Impact On ODL Adoption
The SEC filing also provides insight into ODL adoption trends in 2024. Data from the first nine months shows that only seven out of Tranglo’s ninety-three active customers used ODL for transactions. These transactions accounted for just 4.8% of Tranglo’s remittance revenue and 3.6% of total payment transactions.
Tranglo uses XRP for remittances, but the low adoption rate of ODL transfers indicates a cautious approach following the previous disruptions. This may extend to other partners.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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