What Does Ripple’s Next Big Step Mean for XRP?

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In an unexpected and interesting update, Ripple CEO Brad Garlingouse revealed that the company could go public as soon as within 12 months.

Speaking with the Wall Street Journal at the Economic Forum in Davos, Garlingouse said it is the ”natural evolution” for the blockchain-based payments company.

“In the next 12 months, you’ll see IPOs in the crypto/blockchain space. We’re not going to be the first and we’re not going to be the last, but I expect us to be on the leading side… it’s a natural evolution for our company,” said Garlinghouse.

Just last month, the San Francisco-based company raised $200 million in Series C funding, which valued Ripple at $10 billion. The next step to Series C funding is usually an IPO which helps boost the evaluation of a company.

Ripple has raised a total of $293.6 million in funding till now.

What would it mean for XRP?

XRP enthusiasts and investors are excited about the upcoming IPO. Trader Credible Crypto says, Ripple that owns 60% of all XRP remain as “incentivized as ever (even more so) in the success of XRP as a higher price will directly benefit their bottom line and thereby their shareholders.”

Already, Ripple has big plans for the payments market, as Garlinghouse explained that they are working on fixing the broken payments infrastructure where “those who have the least, pay the most,” with additional capital via IPO, Ripple can work towards achieving its bigger goals.

“We’re victims of a broken global payments infrastructure… You could remodel the house—which SWIFT is doing—but you won’t fundamentally fix the problem unless you rearchitect the house from the ground up, which Ripple is doing,” said Garlinghouse.

By reducing the cost of remittances “dramatically,” he said Ripple could change the ability for billions of people “to participate in the financial system.”

Zero XRP Sold to Exchanges this Time

In its 4Q19 report, Ripple revealed that it did not sell any XRP through its programmatic channels, this refers to XRP sales done through exchanges, in part due to concerns over volume inflation.

In Q4, the focus of the company was solely on its over-the-counter (OTC) sales with a few strategic partners who are building XRP utility and liquidity. Still, it sold only $13.08 million (USD), down from $66.24 million in the previous quarter. This has been the lowest amount Ripple has sold since 1Q17. In total, the company has sold $1.2 billion worth of XRP. The IPO might also allow Ripple to put a cease to these XRP sales.

Given that XRP sales make for a majority of the Ripple’s revenue, it makes sense that Ripple would decrease its sales to restore some confidence in the crypto asset which has lost 94% of its value since its ATH at $3.92 and is currently trading at $0.224.

XRP using ODL Solution Gaining Traction

However, Ripple’s On-Demand Liquidity solution that leverages XRP saw an increase of 550% in the dollar transacted through it. Q4 also saw an increase in the number of ODL transactions by 290% from Q3, “showcasing high customer demand for leveraging digital assets, specifically XRP, in cross-border transactions.”

In Nov. Ripple announced that ODL has gained over two dozen customers including MoneyGram, Interbank Peru, FlashFX, Viamericas, and goLance. Also, in addition to  USD-MXN and USD-PHP ODL corridors, a new production ODL corridor from EUR-USD went into production along with ODL payments originating from Australia into USD and PHP.

On Thursday, MoneyGram announced a strategic partnership with Suez Canal Bank, an Egyptiatian financial institution.

“As we execute our digital transformation to lead the industry in the digital movement of money, a key strategic priority is expanding account deposit services in major international markets,” said Grant Lines, Chief Revenue Officer at MoneyGram. In another news, crypto derivatives platform BitMEX announced the launch of the new XRPUSD quanto swap on Feb. 5, 2020.

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