Ripple received preliminary approval from CSSF, the financial regulator of Luxembourg, to operate as a crypto-asset service provider (CASP). The decision was made on June 23. This refers to the so-called Green Light Letter, meaning preliminary consent from the regulator. Ripple complements this with an EMI license, which it obtained in Luxembourg back in February.
Together, these two authorizations bring the company closer to fully operating under MiCA rules. In this system, a license issued in one country gives access to all 30 countries of the European Economic Area. For Ripple, this is especially important before July 1, when the transition period ends and full authorization becomes mandatory.
This is a strong step for the company. According to market data, Ripple already has more than 75 licenses worldwide, and over $95 billion has passed through its payment network. But in Europe, global experience alone is not enough.
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Green Light Letter does not yet mean that Ripple has received a full license. It is more of a signal that CSSF is generally ready to move forward, but only if the company meets the remaining conditions. Now Ripple needs to prove that its Luxembourg structure is truly ready to handle payments, asset custody, transfers, and stablecoins.
What Is Needed to Obtain a CASP License
The main detail that gets lost amid the headlines concerns the Luxembourg division of Ripple. MiCA does not assess the entire group as a whole, but the specific local company. International experience of Ripple can help, but it does not replace the verification of the structure in Luxembourg itself.
Article 62 MiCA requires the company to clearly state which services it wants to provide. Authorization for custody and transfers of cryptocurrencies does not automatically grant the right to launch a trading platform. Each area requires separate approval.
Ripple must also provide a three-year business plan. The regulator wants to see not only the growth scenario but also how the company will operate under more challenging conditions, if the market slows or demand is lower than expected.
Capital is checked separately. ESMA requires the local company to have its own funds or insurance coverage for the services it plans to provide. The overall balance sheet of the Ripple group does not resolve the issue for the Luxembourg division.
Most of the attention from CSSF will likely be on management. This part can seriously affect how Ripple builds its European team.
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ESMA has already made it clear that there are no low-risk applicants here. A company with a license must actually be managed within the European Union. This means decisions must be made by people on the ground, not by a European office that exists only for formality while all the work is done from San Francisco.
In practice, Ripple will need a management team with real authority. The CEO must be almost fully involved in the work. The regulator will also look at how many functions the company delegates to the parent structure. If too many, the Luxembourg division may be considered an empty shell.
After this, operational checks will begin. Regulators need data on executives and major shareholders, a clear control structure, rules for separating client assets and Ripple‘s own funds, as well as detailed procedures for wallet security, key storage, and access recovery.
There is another important point. ESMA specifically considers companies that both issue a stablecoin and provide crypto services to be higher risk. Ripple fits this description.
Why Stablecoin Will Be the Main Test for Ripple
RLUSD with an offering of about $1.6 billion under MiCA is classified as an electronic money token. As soon as such a stablecoin is used in client operations, Ripple falls under not only crypto regulation but also payment rules.
The European Banking Authority already confirmed this position last year. In a No Action Letter and subsequent opinion, it stated that transferring or storing a stablecoin is considered a payment service. Therefore, a crypto company needs not only a MiCA license but also a payment license. The transition period ended on March 2, so this requirement is already in effect.
Many crypto companies are now urgently trying to add a payment license to their existing authorizations. Ripple is in a more convenient position because it already has a Luxembourg EMI license. Now it adds CASP approval.
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Together, these two licenses allow Ripple to offer European banks a single regulated system for working with both traditional money and crypto assets. This is exactly the format institutional clients have long needed. Judging by Ripple‘s strategy, the company has been preparing Europe for this model for over a year.
But here comes the risk that ESMA warned about. Ripple issues RLUSD and at the same time wants to service operations with this stablecoin. CSSF will closely monitor how the company separates these roles so that token issuance and client servicing do not mix within one structure.
The news had almost no effect on XRP. On June 25, the token traded around $1.10 and did not show a sharp move. It seems the market has already gradually priced in Ripple‘s regulatory successes, as the company has long been building an institutional story around licenses and international payments.
Going forward, what will matter more for the price is not the fact of preliminary approval, but the actual volumes that will flow through Ripple‘s infrastructure. Green Light Letter already gives the company a foothold in Europe. But it will only become a full license when CSSF is convinced that the Luxembourg division is truly capable of fulfilling everything Ripple stated in its application.
