XRP Is More Than Just Another Digital Asset, Presenting Proof of This Theory

As XRP continues to struggle alongside the rest of the market, the pundit behind the community-driven account “All Things XRP” has implored market participants to pay attention to the asset

A pundit within the XRP community has presented what he calls proof that the token is more than just another digital asset.

As XRP continues to struggle alongside the rest of the market, the pundit behind the community-driven account ‘All Things XRP’ has implored market participants to pay attention to the asset, arguing that it is not just another crypto asset.

The token, he claimed, is at the center of a financial revolution, with Ripple’s On-Demand Liquidity (ODL) serving as proof of its real-world use. The argument pivots around the inefficiencies of the global payments system and how XRP, through ODL, is fixing these issues.

The Problem with Cross-Border Payments

According to the pundit, international money transfers are highly inefficient. Transactions can take days to settle, with fees ranging between $25 and $35 per transfer.

Additionally, traditional financial institutions require pre-funded accounts in multiple currencies, which locks up large amounts of capital that could be used elsewhere. These issues make the system slow, costly, and outdated.

In contrast, XRP has set itself up as the key to solving these inefficiencies. The pundit claimed that through ODL (now named Ripple Payments), banks and financial institutions can process transactions in seconds, removing the need for pre-funded accounts while reducing costs.

Investors often view XRP as just another altcoin, but the analyst asserted that this perception is incorrect. Instead of functioning purely as a speculative asset, XRP plays a major role in real-world financial transactions.

The claim is that ODL depends on XRP to function, making it a necessary part of the system. However, it is worth noting that Ripple has previously clarified that ODL can be used without XRP.

In past disclosures, the company mentioned some clients use the service without the token due to regulatory constraints or other factors. While XRP remains an integral part of ODL, these disclosures contradict the assertion that XRP is indispensable to the payment product.

The main argument supporting XRP’s utility is how ODL processes transactions. To facilitate asset movement, a bank or financial institution first exchanges fiat currency, such as USD, for XRP.

This XRP is then rapidly transferred across the XRP Ledger, ensuring near-instant settlement. Once received, the system converts it back into the recipient’s local currency, like MXN or EUR, eliminating the need for traditional banking intermediaries.

The institutions that have used or are using ODL, the pundit stated, include MoneyGram, Tranglo, and various banks and fintech companies.

However, while MoneyGram previously utilized ODL for cross-border remittances, the company terminated its partnership with Ripple in March 2021. Instead, MoneyGram opted to integrate with Stellar, a competing blockchain payments network.

Despite this, the pundit noted that the adoption of ODL continues to grow, with more financial institutions now leveraging the technology. Tranglo, for instance, has been facilitating payments across Asia, and Ripple has forged partnerships with banks worldwide to expand ODL corridors.

The growth of ODL will likely have a direct impact on XRP’s value, the analysis added. As more financial institutions integrate ODL into their operations, the use of XRP increases.

This rise in usage fuels greater demand, which in turn drives the token’s value higher. While the pundit failed to present any price targets, others have projected rallies to an audacious $10,000 price.

However, some like Panos Mekras maintain that ODL will not impact XRP price. Mekras noted this last April, drawing inspiration from a disclosure by Ripple executives, which confirmed that due to its fast payment time, ODL is demand-neutral, neither increasing or decreasing XRP price.

Another community pundit, Mickle, believes this argument is flawed, suggesting that ODL does indeed impact XRP price. This debate has lingered within the XRP community.