On October 10, Ripple announced the launch of new features for Ripple Custody, its digital asset storage service geared toward banks and fintech companies.
Aaron Sletterhaugh, Senior Vice President at Ripple, stated that features such as anti-money laundering (AML) monitoring, pre-configured policy and operational settings, as well as integration with the XRP ledger and a user-friendly interface, will appeal to institutional clients as well as crypto natives looking to keep digital assets.
Ripple’s new custody division has been endeavoring to establish the company in the space for some time now — this latest development follows Ripple’s acquisition of Standard Custody & Trust, announced in February 2024 and closed on June 11.
The business had also acquired Swiss digital asset custody tech company Metaco for $250 million on May 17.
Earlier still, Ripple had partnered with HSBC, Hong Kong’s second-largest bank, to provide custodial services.
XRP supply challenges and ongoing legal concerns
XRP, which is down 14.19% year-to-date (YTD), has been experiencing downward price action for weeks.
A recent high on September 29, which saw the cryptocurrency reach a price of $0.65784, was soon followed by a sharp drop to $0.52677 — a decline of 19.92%.
On October 1, as part of its monthly escrow release, Ripple unlocked 1 billion XRP, substantially increasing supply. This is to be followed by the sale of an additional 200 million XRP by the end of October.
XRP monthly price chart. Source: Finbold
Regulatory actions also added fuel to the fire — although rulings in the case brought by the SEC against Ripple were largely positive in August, the October 3 appeal from the SEC brought legal concerns and uncertainties back to the forefront.
After the appeal, the company’s chief legal officer (CLO) Stuart Alderoty, accused the agency of litigation warfare, while also stating that Ripple is considering filing a cross-appeal, with a deadline of October 17.
Ripple’s new revenue stream and XRP price action
While the ongoing effort to diversify revenue and broaden its regulatory licenses is a wise strategic move, particularly as the crypto custody market is forecast to reach $16 trillion by 2030, it’s unlikely that we will see significant changes in price action due to these positive developments.
The value of XRP will remain dominated by the dance of supply and demand until 2027 — when the escrow schedule is set to conclude.
While good in the long term for the business, this revenue diversification won’t have much of an effect. For one, most of Ripple’s revenue is tied to the value of XRP — this will not, on its own, diversify revenues enough to bring substantial investments aimed at increasing the ecosystem’s capabilities. While positive press can have an effect, this will most likely be overshadowed by ongoing legal and regulatory issues.
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