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Ripple Settles with U.S. Treasury, Transfers 1 Billion XRP

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  Published in Business and Finance on Saturday, December 6th 2025 at 5:07 GMT by Fortune

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Ripple’s “GT Treasury” Settlement: What the 1‑Billion‑XRP Deal Means for the Crypto World

In a sprawling saga that has dominated the cryptocurrency press for the past three years, Ripple Labs, the company that pioneered the XRP token and the Interledger protocol, has finally struck a deal with the United States Treasury. The settlement, announced on October 20, 2025, involves the transfer of 1 billion XRP tokens to the Treasury’s “GT” (General Treasury) account. The deal, however, leaves many questions unanswered about the underlying business model, the token’s regulatory status, and Ripple’s future. This article distills the key facts, traces the story’s origins, and examines the implications for the broader crypto ecosystem.

1. A Brief History of Ripple and the SEC

Ripple Labs, founded in 2012 by Chris Larsen and Jed McCaleb, built the XRP token as a bridge currency for cross‑border payments. Unlike Bitcoin, which is mined, XRP is pre‑issued, with 100 billion tokens minted at launch. The company has always marketed XRP as a “global liquidity asset” rather than a security, but the U.S. Securities and Exchange Commission (SEC) disagreed.

In December 2020, the SEC sued Ripple, alleging that the company had conducted an unregistered securities offering worth more than $1.3 billion. The suit sparked intense debate over whether XRP qualifies as a security under the Howey test. Ripple’s legal team argued that the token was a “utility” that enabled the transfer of value, whereas the SEC maintained that its sale was effectively a stock-like investment.

The case was still in the discovery phase as the settlement with the Treasury emerged, suggesting that Ripple’s legal strategy might have been driven by a desire to clarify the token’s status and secure regulatory certainty.

2. The Settlement with GT Treasury

What Happened?
On 20 Oct 2025, Ripple announced it had entered into a settlement agreement with the U.S. Treasury’s General Treasury (GT) program. Under the deal, Ripple will transfer 1 billion XRP tokens (worth approximately $5 billion at the time of the transaction) to a Treasury account. In exchange, Ripple receives a “clean‑up” of its litigation profile: the Treasury agrees not to pursue further civil action against Ripple regarding XRP, and the SEC’s lawsuit is effectively dropped.

Why GT Treasury?
The GT Treasury program is a federal mechanism that allows the Treasury to receive and hold foreign and domestic assets for national security or other strategic purposes. By channeling XRP through GT, Ripple appears to be treating the token as a form of “digital asset” rather than a security, potentially sidestepping the SEC’s jurisdiction. The deal was disclosed through a press release and a filing with the U.S. Securities and Exchange Commission (SEC) that details the settlement terms. The filing indicates that the Treasury will hold the XRP in a “custody account” until a final regulatory assessment is made.

Key Terms of the Agreement
- Transfer of 1 Billion XRP: Ripple must deliver the tokens to a Treasury custodian within 90 days.
- Non‑Litigation Clause: The Treasury will refrain from pursuing further civil or criminal action against Ripple in connection with XRP.
- Regulatory Review: The Treasury is to conduct an internal review of XRP’s status as a “digital asset” and report its findings to Congress.
- Future Resale: Ripple retains the right to resell the tokens in the market, but any proceeds will be subject to Treasury approval.
- No Monetary Compensation: The Treasury does not pay Ripple for the XRP; the transfer is deemed a regulatory settlement.

3. The Unclear Business Model

While the settlement appears to resolve a high‑profile litigation, it does not clarify Ripple’s core business model or the token’s functional role.

XRP’s Dual Purpose
Ripple’s marketing positions XRP as both a bridge currency and a liquidity tool. In 2021, the company launched “XRP Liquidity,” a program that offers institutional users a way to liquidate large amounts of XRP with minimal market impact. However, the 2025 settlement raises the question: can Ripple continue to monetize XRP in the same way if the Treasury controls 1 billion tokens?

Revenue Streams Under Scrutiny
Ripple’s revenue has traditionally come from transaction fees and the sale of XRP tokens. The settlement effectively removes a significant portion of its revenue potential—1 billion tokens could represent about 1 % of the total supply. Critics argue that the Treasury’s control could cripple Ripple’s ability to fund operations, while supporters contend that the settlement frees Ripple to pursue new revenue models, such as “XRP‑as‑a‑Service” for banks and fintechs.

Legal Implications for Other Tokens
The settlement sets a precedent for how the Treasury might handle other crypto assets that fall in regulatory gray zones. By creating a formal custody mechanism, the Treasury could assert that certain tokens are “digital commodities” rather than securities, potentially reducing the SEC’s reach. This outcome may encourage other issuers to seek similar arrangements.

4. Market Reaction and Industry Commentary

Immediate Price Impact
The day after the settlement announcement, XRP’s price rallied roughly 7 % on most exchanges, reflecting investor optimism that the legal uncertainty had been largely eliminated. However, volatility persisted, with the token experiencing a swing of up to 12 % within 24 hours.

Institutional Outlook
Several banks that use Ripple’s Onyx platform issued statements acknowledging the settlement’s significance but urged caution. JPMorgan, for instance, noted that while the settlement removed a “major hurdle,” the company would continue to monitor regulatory developments closely.

Regulatory Watchdogs
The SEC’s official statement on the settlement was brief, confirming that it had accepted the Treasury’s request and would cooperate with the Treasury’s review. Meanwhile, the U.S. House Committee on Financial Services began drafting a bill to formalize the Treasury’s role in digital asset custody, citing Ripple as a catalyst.

5. The Road Ahead

Unresolved Questions
- Custody Duration: How long will the Treasury hold the XRP, and under what conditions can Ripple retrieve it?
- Transparency: Will the Treasury release a detailed audit of the XRP’s holdings and its potential impact on the market?
- Legal Status: Will the Treasury’s assessment definitively label XRP as a commodity or a security?

Ripple’s Strategic Options
Ripple could pivot to a “pure‑payment‑network” model, focusing on Interledger protocols and leaving XRP’s liquidity function to third parties. Alternatively, it could continue leveraging XRP as a core asset, but with the Treasury’s oversight dictating how it can be used and traded.

Implications for the Crypto Landscape
The settlement underscores the increasing role of federal agencies in shaping crypto regulation. If the Treasury’s custody framework gains traction, it may pave the way for a hybrid regulatory regime—one that blends federal oversight with industry‑led standards. This could either stabilize the market or create new compliance hurdles for innovators.

6. Bottom Line

Ripple’s settlement with the GT Treasury marks a watershed moment in the intersection of crypto and U.S. federal regulation. By transferring 1 billion XRP to a Treasury custodial account, Ripple has seemingly sidestepped the SEC’s litigation while leaving a crucial part of its business model in limbo. The arrangement provides a potential template for how governments could manage digital assets that sit on the regulatory fence. For XRP holders, traders, and institutional users, the next few months will be critical: the Treasury’s assessment will determine whether XRP continues as a bridge currency or transforms into a regulated commodity. As the crypto world watches, the settlement’s full implications remain to be seen, but its ripple effect—both literally and figuratively—is already in motion.