Despite the expected conclusion of Ripple's legal battle with the SEC, banks remain hesitant to announce partnerships due to regulatory risks.
Regulatory Barriers to Collaboration
U.S. banks operate under strict oversight from multiple regulatory bodies like the OCC, the Federal Reserve, and the SEC. These regulators have specific requirements for financial institutions considering partnerships with fintech firms. Banks need to thoroughly prove compliance before any public commitment with Ripple.
AML Compliance and History
Financial institutions are cautious of Ripple's history, notably the 2015 FinCEN fine for BSA violations. Banks must ensure Ripple meets AML standards before entering into significant partnerships.
Risk Management and Reputation Concerns
Banks evaluate reputational risks carefully when working with fintech companies, especially those involved in legal proceedings. Without full confidence in Ripple's legal standing, public partnership announcements are withheld.
While banks are reportedly holding private discussions with Ripple, official announcements will only come once regulatory concerns are fully addressed.
