{"id":17709,"date":"2025-03-18T23:15:59","date_gmt":"2025-03-18T23:15:59","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=17709"},"modified":"2025-03-18T23:15:59","modified_gmt":"2025-03-18T23:15:59","slug":"xrps-role-in-us-digital-asset-stockpile-raises-questions-on-token-utility-does-it-belong","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=17709","title":{"rendered":"XRP\u2019s role in US Digital Asset Stockpile raises questions on token utility \u2014 Does it belong?"},"content":{"rendered":"
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\"XRP\u2019s<\/p>\n

Ripple\u2019s XRP (XRP<\/a>), the third-largest cryptocurrency by market cap, gained national recognition after President Donald Trump mentioned the \u201cvaluable cryptocurrency\u201d alongside BTC, ETH, SOL, and ADA as part of a planned US strategic crypto reserve<\/a>. <\/p>\n

Trump\u2019s executive order<\/a> on March 6 established a new structure for the altcoins \u2014 the Digital Asset Stockpile, managed by the Treasury.\u00a0<\/p>\n

While the crypto community remains divided on whether XRP is truly as valuable as President Trump suggests, a closer look at the altcoin\u2019s utility is warranted.\u00a0<\/p>\n

XRP\u2019s potential role in banking<\/h2>\n

Launched in 2012 by Ripple Labs, the XRP Ledger (XRPL) was designed for interbank settlements. It initially offered three enterprise solutions: xRapid, xCurrent, and xVia, all later rebranded under the RippleNet umbrella. XCurrent is real-time messaging and settlement between banks, xVia is a payment interface allowing financial institutions to send payments through RippleNet, and xRapid, now part of On-Demand Liquidity (ODL), facilitates cross-border transactions.<\/p>\n

Only ODL actually requires XRP; the other services allow banks to use RippleNet without ever holding the token. This means bank adoption of Ripple technology does not always drive XRP\u2019s price.<\/p>\n

Some of the world\u2019s largest banks have used xCurrent and xVia, including American Express, Santander, Bank of America, and UBS. There is less data on the entities that use XRP-powered ODL service. Known adopters include SBI Remit, a major Japanese remittance provider, and Tranglo, a leading remittance company in Southeast Asia.<\/p>\n

XRP\u2019s role in Web3<\/h2>\n

XRP is also used as a gas token. However, unlike the Ethereum network, where fees go to validators, a small amount of XRP is burned as an anti-spam mechanism.<\/p>\n

XRP\u2019s role in Web3 is minimal. Unlike Ethereum, Ripple does not support complex smart contracts or DApps. It offers only basic Web3 functionality, such as a token issuance mechanism and native NFT support under the XLS-20 standard, introduced in 2022.<\/p>\n

The XRPL Web3 ecosystem is small. Its modest DeFi sector holds $80 million in total value locked (TVL), according to DefiLlama<\/a>. XRPL\u2019s tokens have a combined market cap of $468 million, according to Xrpl.to<\/a>. Most of them are DEX tokens (SOLO) and memes (XRPM), as well as wrapped BTC and stablecoins.<\/p>\n

So far, XRPL\u2019s Web3 sector remains niche and trails true smart contract platforms like Ethereum and Solana.<\/p>\n

Related: <\/strong><\/em>SEC delays decision on XRP, Solana, Litecoin, Dogecoin ETFs<\/strong><\/em><\/a><\/p>\n

Crypto pundits split hairs on XRP\u2019s role in a strategic reserve<\/h2>\n

Ripple Labs representatives have long advocated for equal treatment of cryptocurrencies, with CEO Brad Garlinghouse reiterating<\/a> this on Jan. 27.\u00a0<\/p>\n

Garlinghouse said,\u00a0\u00a0<\/p>\n

\u201cWe live in a multichain world, and I\u2019ve advocated for a level-playing field instead of one token versus another. If a government digital asset reserve is created\u2014I believe it should be representative of the industry, not just one token (whether it be BTC, XRP or anything else).\u201d<\/p><\/blockquote>\n

However, not all cryptocurrencies serve the same purpose. Bitcoin\u2019s primary role is to be a \u201cgeopolitically neutral asset like gold,\u201d in the words<\/a> of crypto analyst Willy Woo. XRP\u2019s purpose remains less clear, but few in the crypto space would argue that it could qualify as independent money. <\/p>\n

This is primarily due to one of Ripple\u2019s most uncomfortable aspects\u2014its permissioned nature. Unlike Bitcoin or Ethereum, Ripple does not rely on miners or staked tokens to secure the network. Instead, it uses a Unique Node List\u2014a group of trusted validators responsible for approving transactions. While this optimizes speed and efficiency, it raises concerns about censorship, corruption, and security risks.<\/p>\n

Bitcoin proponent and co-founder of Casa Jameson Lopp didn\u2019t hold back<\/a> when discussing XRP\u2019s potential:<\/p>\n

\u201cThere\u2019s Bitcoin, then there\u2019s Crypto, then there\u2019s Ripple. Ripple has attacked Bitcoin at a level rivaled only by BSV\u2019s lawsuits. Ripple explicitly wants to power CBDCs. They have always been focused on servicing banks. Few projects are as antithetical to Bitcoin.\u201d<\/p><\/blockquote>\n

There\u2019s no love lost between Bitcoiners and Ripple supporters, especially after Ripple co-founder Chris Larsen partnered with Greenpeace to fund an anti-Bitcoin campaign<\/a>.\u00a0<\/p>\n

However, Lopp\u2019s comparison to CBDCs holds some weight, given XRPL\u2019s permissioned nature. It reflects a common view in the crypto community that XRP functions more like a banking tool than a truly independent cryptocurrency.<\/p>\n

While the XRPL blockchain sees widespread use in banking, XRP\u2019s utility remains a point of concern. It is underscored by the fact that approximately 55% of the 100 billion pre-mined coins are still held by Ripple Labs. This concentration raises concerns about potential market manipulation<\/a> and the coin\u2019s long-term stability.\u00a0<\/p>\n

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/p>\n