A substantial increase in XRP's market value could bolster global financial stability

Financial educator and wealth mentor Linda Jones has stated that a substantial increase in XRP's market value could bolster global financial stability.

Financial educator and wealth mentor Linda Jones has discussed how a higher market valuation of Ripple’s XRP token could be beneficial for global financial stability, drawing on her expertise in her recent episode of the “Be Wealthy and Smart” podcast.

Examining the Potential of XRP in Crisis Mitigation

Pointing out that a higher valuation of XRP would provide Ripple with significant financial resources, Jones suggested how this could be used to help during times of economic downturn. Noting that the burden of financial crises often falls on taxpayers, she said:

“If we have an entity like Ripple, with a valued token and the capacity to mobilize resources across borders, they could potentially help to mitigate some of the crisis without needing to put the burden on taxpayers.”

Currently, Ripple holds around 41.64 billion XRP tokens. At a market price of $2.09 per token, this amounts to over $83 billion in assets. Should XRP’s value rise to $100 per token, then Ripple’s total holdings would exceed $4.1 trillion. With such financial capacity, Jones suggests that Ripple could assist in mitigating future financial crises, reducing reliance on government interventions.

Discussing the strategic importance of Ripple’s acquisition of brokerage firm Hidden Road, Jones said that this move allows Ripple to offer tokenized securities solutions outside the traditional banking framework. She added that integrating Hidden Road’s infrastructure with the XRP Ledger will enable near-instantaneous trade settlements with tokens, contrasting with the multi-day delays in the current system.

This integration is expected to enhance transparency and reduce opportunities for fraudulent activities and excessive leverage, issues that have plagued traditional financial systems.

Lessons from the Archegos Capital Collapse

Referencing the 2021 collapse of Archegos Capital Management as a case study in systemic financial vulnerabilities, Jones explained how the firm’s downfall, attributed to excessive leverage and lack of transparency, resulted in over $10 billion in losses for major banks.

She stated that Ripple’s approach, focused on blockchain-verified transactions and real-time settlements, addresses many of the shortcomings highlighted by the Archegos incident.

Jones envisions a reimagined financial infrastructure where entities like Ripple, empowered by a higher-valued XRP, play a proactive role in maintaining economic stability and recovery efforts.

In her view, such a model could offer a more sustainable alternative to traditional systems, potentially preventing future financial crises and reducing the burden on taxpayers.