Ripple, the payments company behind the XRP token, currently the third biggest cryptocurrency by market cap, reportedly recently sold nearly $100 million worth of XRP, after the token saw its value surge nearly 30,000 percent.
According to CNBC, the company that’s developing blockchain-based systems for banks sold $91.6 million in its XRP tokens last quarter. Per the company, the markets “ended the year with a statement,” that will “likely be remembered” as a milestone in the XRP token’s history.
The token’s surge was essentially a huge boom to the company’s balance sheet. Ripple owns about 60 percent of all XRP tokens in existence. Thanks to token sales it raised $180 million in 2017, without giving up any equity. In total, there are 100 billion XRP tokens, and Ripple holds 61 billion.
Most of its holdings – 55 billion – are held in escrow, to control the flow of XRP entering the market. At press time, according to Cryptocompare, each XRP token is trading at $1.31., meaning the company holds a total of $78.6 billion. Speaking to CNBC, Ripple CEO Brad Garlinghouse, a now paper billionaire thanks to his XRP holdings, stated the sale of funds held in escrow is limited to 1 billion a month.
Per reports, Ripple has made over $185 million in XRP sales since September 2016. While some thoroughly believe in the token’s potential, others see it as a way for the company to make money. Speaking to Bloomberg, ConsenSys founder Joseph Lubin stated:
“It’s bewildering. Effectively, it’s a totally useless token except that it is being used by that company to make a lot of money to fund some of their activities.”
The company’s main product, RippleNet, currently doesn’t rely on the XRP token. RippleNet is similar to Swift, as it’s primarily a system that tells banks where to send the money, and helps them settle transactions. Nevertheless, Garlinghouse stated that XRP is “absolutely at the core of what Ripple is doing.”
Ripple’s XRP crusade
According to Bloomberg, current and former executives at seven global banks, who requested anonymity, claimed there was a “scant chance they would ever entrust their corporate clients’ payments to a cryptocurrency” like XRP. Notably, some of the represented financial institutions are partnered with Ripple.
Behind the banks’ attitude are regulations. If regulators don’t approve the use of XRP, then banks are certainly not going to use it, according to an executive in the payment industry “familiar with Ripple’s business.”
That said, Ripple recently announced a partnership with MoneyGram. The latter is now using Ripple’s xRapid technology and XRP for cross-border payments, according to an announcement. MoneyGram recently clarified XRP is just being used for a pilot program.
Hello, This is a pilot program being tested on internal MoneyGram International processes and is not intended for consumer use.
— MoneyGram (@MoneyGram) January 11, 2018
In a separate announcement, Ripple stated IDT Corporation and Mercury FX will also start using its xRapid technology to “settle remittances and corporate transactions quickly.”