XRP Surges as U.S. Government May Hold Ripple Penalty in Crypto

In a notable development, the interests of the U.S. government and the XRP community have converged for the first time, potentially unlocking XRP's long-awaited utility. This alignment is centered around the possibility that the U.S. government will hold XRP for the first time in history. Crypto entrepreneur Yassin Mobarak has speculated that Ripple’s $125 million penalty to the U.S. Securities and Exchange Commission (SEC) could be paid in XRP rather than U.S. dollars. This development would align the interests of the government and the XRP community, potentially unlocking XRP’s long-awaited utility in the U.S.

The penalty stems from a court ruling that Ripple violated securities laws through institutional XRP sales. To manage this payment, Ripple requested a delay and proposed placing the $125 million into an escrow account, an arrangement the SEC accepted. However, whether the escrowed funds were held in U.S. dollars or XRP remains unclear. Mobarak’s theory is tied to a newly announced U.S. government Stockpile account, which is expected to contain select high-quality digital assets with sufficient market liquidity. He suggested that the SEC might accept Ripple’s penalty payment in XRP and deposit it into this Stockpile.

Donald Trump recently announced the creation of the national crypto reserve. According to his executive order, the U.S. will fill the stockpile with assets obtained through forfeitures. If Ripple pays $125 million worth of XRP into this stockpile, Mobarak believes it would mark a major shift for XRP. He also believes Ripple will gladly agree to this arrangement, as the U.S. government will hold XRP for the first time, and may be incentivized to let its price grow. According to him, this could remove regulatory barriers that have hindered XRP’s use in the U.S. and lead to positive price movements.

The discussion around Ripple’s penalty comes amid significant changes in the SEC’s approach to cryptocurrency regulation. The regulator recently dismissed its lawsuit against Coinbase and dropped investigations into Uniswap Labs, Gemini, and other crypto firms. This shift suggests a departure from the aggressive enforcement strategy seen under former SEC Chair Gary Gensler. However, the Ripple lawsuit remains unresolved, and its appeal process is ongoing. Mobarak noted that the Interests of the U.S. government and X