Ripple’s XRP, the third-largest cryptocurrency by market capitalization, has gained national attention after President Donald Trump mentioned it as part of a planned US strategic crypto reserve. While some see XRP as a valuable asset, its utility remains a topic of debate.
XRP’s role in banking is a key aspect of its value proposition. Launched in 2012, the XRP Ledger is designed for interbank settlements, offering solutions such as real-time messaging and settlement (xCurrent), payment interfaces (xVia), and cross-border transactions (On-Demand Liquidity). Several major banks, including American Express and Bank of America, have used these services. However, it’s worth noting that not all XRP-powered services require the token; xCurrent and xVia can be used without holding XRP.
XRP is also used as a gas token in Web3, but its role is limited compared to Ethereum. It does not support complex smart contracts or DeFi applications, instead offering basic functionality such as token issuance and native NFT support under the XLS-20 standard. The XRPL Web3 ecosystem remains small, with most tokens being DEX tokens, memes, or wrapped BTC.
The concentration of XRP among Ripple Labs, which holds approximately 55% of the pre-mined coins, raises concerns about market manipulation and long-term stability. This aspect has sparked debate within the crypto community, with some viewing it as a limitation on its utility.
Ultimately, XRP’s value proposition hinges on its ability to serve a specific purpose in the financial sector. While it may not be seen as an independent cryptocurrency, its use in banking and potential role in a strategic reserve make it worth considering.
Source: https://cointelegraph.com/news/xrp-s-role-in-us-digital-asset-stockpile-raises-questions-on-token-utility-does-it-belong