Trump's Crypto Reserve Boosts XRP by 20%

Ripple’s XRP, the third-largest cryptocurrency by market cap, has gained significant attention following President Donald Trump's mention of it as part of a planned US strategic crypto reserve. This inclusion has sparked debate within the crypto community about XRP's true value and its role in the digital asset landscape.

Trump's executive order on March 6 established the Digital Asset Stockpile, managed by the Treasury, which includes XRP alongside other prominent cryptocurrencies like BTC, ETH, SOL, and ADA. This move has raised questions about XRP's utility and whether it deserves a place in such a strategic reserve.

Launched in 2012 by Ripple Labs, the XRP Ledger (XRPL) was designed for interbank settlements. Initially, it offered three enterprise solutions: xRapid, xCurrent, and xVia, all later rebranded under the RippleNet umbrella. XCurrent facilitates real-time messaging and settlement between banks, xVia is a payment interface for financial institutions, and xRapid, now part of On-Demand Liquidity (ODL), enables cross-border transactions. However, only ODL requires the use of XRP, meaning that bank adoption of Ripple technology does not always drive XRP’s price.

Several major banks, including American Express, Santander, Bank of America, and UBS, have utilized xCurrent and xVia. In contrast, the entities using XRP-powered ODL service are less documented, with known adopters including SBI Remit and Tranglo.

XRP also functions as a gas token, with a small amount burned as an anti-spam mechanism. However, its role in Web3 is minimal compared to platforms like Ethereum and Solana. The XRPL Web3 ecosystem is small, with a modest DeFi sector holding a total value locked (TVL) and a combined market cap of tokens that are primarily DEX tokens and memes.

Ripple Labs representatives, including CEO Brad Garlinghouse, have advocated for equal treatment of cryptocurrencies. Garlinghouse emphasized the need for a level-playing field rather than favoring one token over another. However, the purpose of XRP remains less clear, and its permissioned nature raises concerns about censorship, corruption, and security risks.

Critics like Jameson Lopp, a Bitcoin proponent, have highlighted the differences between Bitcoin and XRP, noting that XRP's focus on servicing banks makes it more akin to a banking tool than an independent cryptocurrency. This view is supported by the fact that approximately 55% of the 100 billion pre-mined XRP coins are still held by Ripple Labs, raising concerns about potential market manipulation and long-term stability.

While the XRPL blockchain sees widespread use in banking, the utility of XRP remains a point of concern. The debate over XRP's role in the US Digital Asset Stockpile underscores the need for a clearer understanding of its value and purpose within the broader cryptocurrency ecosystem.