Ripple’s XRP (XRP), the third largest cryptocurrency in market capitalization, gained national recognition after President Donald Trump mentioned “a valuable cryptocurrency” along with BTC, ETH, SOL and ADA. US Strategic Crypto Reserve.
Trump’s Executive Order On March 6, a new structure was established for Altcoins – a digital asset inventory managed by the Ministry of Finance.
Although the cryptocurrency community is indeed as valuable as President Trump suggests, the utility of Altcoin must be carefully studied.
The potential role of XRP in the banking industry
Launched by Ripple Labs in 2012, XRP Ledger (XRPL) was designed for interbank settlements. It initially offered three enterprise solutions: Xrapid, Xcurrent and XVIA, all later renamed under the Ripplenet umbrella. XCurrent is a real-time messaging and solution between banks, XVIA is a payment interface that allows financial institutions to send payments over Ripplenet, while Xrapid (now part of On-Demand Liquidity (ODL)) facilitates cross-border transactions.
Only ODL actually requires XRP; other services allow banks to use Ripplenet without holding tokens. This means that banks’ adoption of ripple technology does not always drive the price of XRP.
Some of the world’s largest banks use Xcurrent and XVIA, including American Express, Santander, Bank of America and UBS. Entities using XRP-driven ODL services have less data. Known adopters include SBI Remit, a major Japanese remittance provider, and Tranglo, a leading Southeast Asia remittance company.
The role of XRP in Web3
XRP is also used as a gas token. However, unlike the Ethereum network (which charges on validators), burning a small amount of XRP into an anti-spam mechanism.
XRP has little effect in Web3. Unlike Ethereum, Ripple does not support complex smart contracts or DAPPs. It only provides basic Web3 features, such as the token issuance mechanism and native NFT support under the XLS-20 standard launched in 2022.
The XRPL Web3 ecosystem is small. According to the sector’s modest track industry, the industry holds $80 million in total value lockdown (TVL). defill. XRPL’s token’s total market capitalization is $468 million. xrpl.to. Most of them are Dex tokens (solo) and memes (XRPM), as well as packaged BTC and StableCoins.
So far, XRPL’s Web3 space remains a niche and has delayed real smart contract platforms like Ethereum and Solana.
Related: SEC Delay Decision on XRP, Solana, Litecoin, Dogecoin ETFS
Crypto experts in the role of XRP in strategic reserves divide hair
Ripple Labs Representatives have long advocated equal treatment for cryptocurrencies, CEO Brad Garlinghouse Reiterate This is on January 27th.
Garlinghouse said,
“We live in multiple worlds and I advocate for a field of horizontal play, not one token with another symbolic field. If a government digital asset reserve is created – I think it should represent the industry, not just one token (whether it is BTC, XRP or something else).
However, not all cryptocurrencies have the same purpose. Bitcoin is in Character Crypto analyst Willy Woo. The purpose of XRP is still unclear, but in the cryptocurrency space, few people would think it can be qualified as a standalone currency.
This is mainly due to one of the most uncomfortable aspects of Ripple, namely its licensing nature. Unlike Bitcoin or Ethereum, Ripple does not rely on miners or fixed tokens to protect the network. Instead, it uses a unique list of nodes – a group of trusted validators responsible for approving transactions. While this optimizes speed and efficiency, it raises concerns about censorship, corruption and security risks.
Bitcoin supporter and co-founder of Casa Jameson Lopp No retreat When discussing the potential of XRP:
“There is Bitcoin, then cryptocurrency, then Ripple. Ripple attacked Bitcoin only with the BSV lawsuit as a competitive level. Ripple explicitly wanted to power CBDC. They have been focusing on serving banks. There are few projects that are contrary to Bitcoin.”
No lost love between Bitcoin and Ripple supporters, especially in Ripple co-founder Chris Larsen worked with GreenPeace to fund A Inverse currency movement.
However, given the permission nature of XRPL, the comparison of LOPP and CBDC has a certain weight. It reflects a common view in the crypto community that XRP functions more like a banking tool than a truly standalone cryptocurrency.
Although XRPL blockchain is seen widely in the banking industry, XRP’s utility remains a concern. The fact that Ripple Labs still holds about 55% of the 100 billion pre-loaded coins is underlined. This concentration has attracted people’s attention Market manipulation and the long-term stability of the coins.
This article is for general information purposes and is not intended to be considered legal or investment advice. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent Cointelegraph’s views and opinions.
