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Ahmed Barakat
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The latest XRP news is putting the XRP Ledger back in the spotlight after the SEC opened a new path for tokenized stocks to trade through automated market makers. The SEC’s September 17 decision created a temporary exemption for certain blockchain-based venues to facilitate tokenized U.S. stocks through permissioned AMM liquidity pools.
The decision does not specifically mention XRP, Ripple, or the XRP Ledger. Instead, it establishes a framework for Tokenized Securities Venues, allowing eligible platforms to operate AMM-based markets under certain conditions.
Why could it be bullish for XRP? XRP Ledger already has a native AMM. Its AMM amendment went live on Mainnet in March 2024, giving the network built-in liquidity pools alongside its existing decentralized exchange. That makes the latest SEC decision particularly interesting for the XRP ecosystem.
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SEC Opens AMM Door for Tokenized Stocks
The SEC’s Innovation Exemption provides temporary relief from certain securities rules for Tokenized Securities Venues. These venues can use automated market makers and liquidity pools to bring buyers and sellers of tokenized National Market System stocks together.
The exemption is conditional rather than a blanket approval for tokenized equities across crypto markets. The SEC said participating venues must operate permissioned systems and comply with specific investor protection requirements.
Among those requirements, tokenized stocks must provide holders with the same rights and privileges as the equivalent traditional shares. That includes rights such as dividends and voting.
The framework also gives the original stock issuer an opportunity to object when a third party tokenizes its shares. Trading must also stop when trading in the underlying stock is halted on its primary listing exchange.
For crypto markets, however, the most notable part may be the SEC’s explicit recognition of AMM liquidity pools as part of an onchain securities trading structure.
The SEC said its order also provides conditional relief for certain liquidity providers supplying tokenized stocks to these pools. The exemptions are scheduled to last five years, giving regulators time to observe how the market develops.
That has created a new conversation around blockchain networks that already have native AMM infrastructure.
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XRP News Turns to the XRP Ledger’s Existing AMM
This is where the XRP Ledger enters the discussion. XRPL’s AMM functionality was introduced through the XLS-30 amendment, which became active on Mainnet on March 22, 2024.
Unlike a separate application running above the network, the AMM is integrated into the XRP Ledger’s decentralized exchange. Users can create liquidity pools for asset pairs, provide liquidity, and receive LP tokens representing their positions.
The XRPL’s documentation says its DEX can combine order-book liquidity and AMM liquidity when executing trades, allowing transactions to use whichever route provides the better exchange rate. That native design is now more relevant as regulators begin addressing onchain securities markets.
Still, it would be premature to say the SEC has approved tokenized stocks on XRPL. The Innovation Exemption is technology-neutral and establishes requirements for eligible Tokenized Securities Venues rather than approving individual blockchains.
For XRP holders, the significance is therefore more about infrastructure than an immediate new use case for XRP.
If regulated tokenized equity markets eventually expand onto public blockchains, networks with existing AMM and DEX infrastructure could have an established foundation to build upon. XRPL already has that foundation, while the SEC has now provided a regulatory framework that explicitly contemplates AMM-based trading.
The next question is whether financial firms actually choose public networks such as XRPL for these markets. The SEC has opened the door, but the industry still has to walk through it.
For now, the XRP news story is less about an SEC endorsement of XRP and more about a regulatory development that could make XRPL’s existing AMM architecture increasingly relevant to tokenized assets.
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