Ripple may be building for banks, but XRP still down 20% – Why?

Ripple is making it easier for institutions to enter crypto. The timing helps, because U.S. stablecoin rules are starting to ease. That puts the company (and its stablecoin RLUSD) in a good spot as institutions go all hands on deck.

Custody upgrades to target institutions

The company recently announced that it has expanded its institutional custody platform through new integrations with Securosys and Figment.

This adds hardware-based security tools, which allows banks and custodians to offer digital asset custody and staking. This, without running their own validators or building complex key-management systems. Institutions can manage cryptographic keys using either on-premises or cloud-based hardware security modules.

Source: Businesswire

The platform will also support staking on major networks such as Ethereum [ETH] and Solana [SOL], with compliance checks built directly into transaction workflows.

This update comes on the back of Ripple’s recent acquisition of Palisade and move beyond payments into custody, treasury, and post-trade services. That includes the recent launch of a corporate treasury platform that links traditional systems with digital asset infrastructure.

It doesn’t stop there…

U.S. regulators are taking a more flexible approach to stablecoins right now. This week, the CFTC issued a no-action letter that broadens how certain dollar-pegged tokens can be used. This will also allow national trust banks to issue payment stablecoins under the GENIUS Act framework.

Source: X

This will make way for stablecoins to integrate closely with TradFi, particularly for firms operating under banking rules. Ripple’s dollar-backed stablecoin, RLUSD is set to benefit.

The company has also made known its intent to become a national trust bank.

All these developments, and yet…

…native token XRP is down over 20% YTD. In fact, its recent price action showed XRP struggling to reclaim key levels, with rallies fading quickly. While the selling pressure eased to an extent, it might not be enough to bring in a trend reversal yet.

Source: TradingView

For any upside to return, XRP would likely need a greater change in sentiment or clearer demand tied to Ripple’s recent push. Until then, looks like traders will be hesitant.