Sure enough, I've found the law that would prevent a bank from using an oscillating security such as Ripple for fund transfers, further codified in the CFR.
https://www.law.cornell.edu/cfr/text/12/1005.1§ 1005.1 Authority and purpose.
(a)Authority. The regulation in this part, known as Regulation E, is issued by the Bureau of Consumer Financial Protection (Bureau) pursuant to the Electronic Fund Transfer Act ( 15 U.S.C. 1693et seq.). The information-collection requirements have been approved by the Office of Management and Budget under 44 U.S.C. 3501et seq. and have been assigned OMB No. 3170-0014.
(b)Purpose. This part carries out the purposes of the Electronic Fund Transfer Act, which establishes the basic rights, liabilities, and responsibilities of consumers who use electronic fund transfer and remittance transfer services and of financial institutions or other persons that offer these services. The primary objective of the act and this part is the protection of individual consumers engaging in electronic fund transfers and remittance transfers.
[ 76 FR 81023, Dec. 27, 2011, as amended at 77 FR 6285, Feb. 7, 2012]
https://www.law.cornell.edu/cfr/text/12/1005.3§ 1005.3 Coverage.
(a)General. This part applies to any electronic fund transfer that authorizes a financial institution to debit or credit a consumer's account. Generally, this part applies to financial institutions.
(c)Exclusions from coverage. The term electronic fund transfer does not include:
(4)Securities and commodities transfers.
Using an oscillating security such as the publicly traded XRP token for Electronic Fund Transfers would be absolutely illegal in the US.