If the court rules that XRP is a security, it would mean the same for other alternative cryptocurrencies and subject the broader market to stringent supervision.
The token's price has jumped 20% in the past 24 hours as Ripple defendants heralded a positive view in their case with the U.S. Securities and Exchange Commission.
The proposal defines how funds are locked on one chain and wrapped on another chain to ensure the movement of tokens between XRP Ledger and associated sidechains.