The adoption of XRP by banks for payments is gaining momentum, with reports indicating that one planned bank tied to Ripple will operate entirely on the XRP Ledger. This development comes as Ripple pursues a New York banking charter, a Federal Reserve master account, and compliance with ISO 20022 messaging standards used by major financial institutions. These efforts are aimed at making XRP more suitable for large-scale settlement activities.
Recent collaborations between DBS and Franklin Templeton have further cemented the use of XRP in real-world applications. A memorandum of understanding signed between the two entities focuses on tokenized trading and lending products, with Franklin Templeton’s sgBENJI, a US dollar money market fund token, launching on DBS Digital Exchange. The use of Ripple’s RLUSD stablecoin to support trading activities, valued at nearly $730 million, underscores the growing acceptance of digital assets in institutional settings.
Nigel Khakoo of Ripple highlighted the seamless movement between stablecoins and yield-generating tokens within a single setup, facilitated by the XRP Ledger. Additionally, BNY Mellon’s role as the custodian for reserves backing RLUSD emphasizes Ripple’s institutional approach to tokenization.
The token’s recent momentum follows legal and regulatory changes in the US, with reports suggesting that more than 20 spot XRP ETFs are being considered. The Depository Trust & Clearing Corporation’s mention of tokenization in its planning documents signals a potential shift towards tokenized settlement rails, which could revolutionize back-office operations if widely adopted.
While banks are cautiously exploring the integration of XRP for settlements, industry sources predict that the combination of custody arrangements, stablecoins, and ledger-based settlement could unlock trillions of dollars in flows. However, widespread adoption will require time and robust risk management practices.
Market speculation on XRP prices has intensified, with the token currently trading around $2.8. Analysts have varied opinions on future price targets, with some forecasting a move to $50, while others predict figures as high as $10,000. Despite the price speculation, XRP’s technical advancements and regulatory progress continue to fuel optimism among investors and industry experts.
In conclusion, the increasing adoption of XRP by banks and financial institutions signals a significant shift towards digital asset utilization in traditional finance. As Ripple continues to make strides in regulatory compliance and infrastructure development, the potential for XRP to revolutionize settlement processes and unlock new avenues for capital flows remains promising.