Ripple's strategy: Keep XRP prices low to attract banks, ensuring widespread adoption and future scarcity.
XRP aimed to be a global reserve currency with a massive initial supply of 100 billion tokens.
Ripple to reintroduce smart contracts by 2025, enhancing XRP's utility in the digital financial system.
In a detailed revelation on X, Common Sense Crypto, a noted figure in cryptocurrency analysis, elucidated Ripple's tactical decision to keep the price of XRP low during its initial phase.
This strategy was aimed at enhancing the cryptocurrency’s appeal among financial institutions. According to Common Sense Crypto, Ripple engaged directly with banks, promoting XRP as an economically viable option.
https://twitter.com/TheCSCrypto/status/1844051510365134879
The low-pricing model strategy was designed to offer such an unrefusable value proposition so that banks would have no choice but to adopt it. As Ripple’s Chief Technology Officer, David Schwartz, has said previously, the amount of XRP required for Ripple’s On Demand Liquidity (ODL) to work efficiently must be priced higher.
This requirement stems from the need for the ODL to handle large transactions smoothly, suggesting that as the price of XRP increases, so does its functional viability within the system.
XRP’s Role as a Global Reserve Currency and Market Adoption
Further into the discussion, Common Sense Crypto addressed the potential of XRP envisioned by its creators. Ripple's CEO, Brad Garlinghouse, highlighted in a video that XRP was created to become a global reserve currency, which justifies the massive supply of 100 billion tokens.
Contrary to creating a surplus, this large supply is part of a long-term strategy to ensure XRP's extensive integration into the global financial infrastructure. The strategic move aims to set a stage where, despite its ample availability, the demand driven by widespread adoption would eventually lead to scarcity, thereby increasing its value.
Ripple’s Reintroduction of Smart Contracts in 2025
Ripple plans to reintroduce smart contracts by 2025, which is seen as a step towards enhancing XRP's functionality beyond its current applications. Common Sense Crypto suggested that discontinuing smart contracts initially was a strategic pause, allowing Ripple to cement its foundational role in the financial sector through partnerships and essential financial channels.
The post Ripple’s XRP Debated as Potential Global Reserve Asset appeared first on Crypto News Land.
