Ripple Clarifies XRP’s Role in Payment Solutions, Hides Price Volatility from Customers
1min read Ripple has recently clarified how the price of XRP will be invisible to customers using its payment solutions. A crypto researcher, SMQKE, highlighted Ripple’s perspective on XRP’s price and its impact on liquidity through a tweet. The tweet included an excerpt from a 2018 document and a video featuring a Ripple spokesperson explaining the interaction between customers and the digital asset in cross-border transactions.
The document referenced in the tweet emphasizes that a higher value of XRP increases the value of Ripple’s solution by enhancing liquidity on the network. This means that XRP can convey a higher value than other currencies, making transactions more efficient. The document also notes that when XRP was valued at over $2.5 per coin in early 2018, Ripple’s co-founder and former CEO, Chris Larsen, was among the wealthiest individuals due to his shares of XRP and equity in the company. This historical context illustrates the potential for significant value appreciation of XRP.
In the video shared by SMQKE, a Ripple representative explained that customers using Ripple’s payment solutions are not directly exposed to XRP’s price volatility. The representative stated that businesses are focused on fiat currency, which is their lifeline. Therefore, Ripple’s system hides any visibility into the cryptocurrency XRP, presenting customers with a fiat-to-fiat payment option. This means that the price fluctuations of XRP are irrelevant to the customers, who only need to know that they can make their payments seamlessly.
The spokesperson further clarified that Ripple protects its customers from any fluctuations in the open market. The customer is never exposed to any price changes of the digital asset, ensuring a smooth transaction process. This approach highlights Ripple’s commitment to providing a user-friendly experience while leveraging the benefits of XRP’s liquidity and market value.
Ask Aime: How does Ripple's pricing mechanism for XRP impact the efficiency and user experience of cross-border transactions within its payment solutions?
SMQKE summarized the information by stating that Ripple’s solution relies on XRP having a high price. This aligns with the claim in the document that a higher value for XRP enhances liquidity and strengthens the network’s functionality. While customers do not directly engage with XRP’s price fluctuations, the asset’s value remains crucial in ensuring efficient and large-scale liquidity within Ripple’s ecosystem.
The discussion sparked by this post underscores the dual nature of XRP within Ripple’s ecosystem. Businesses benefit from the streamlined fiat-to-fiat experience, while the underlying role of XRP in enabling these transactions depends on its liquidity and market value. This approach ensures that customers can focus on their transactions without being concerned about the volatility of XRP, while Ripple continues to leverage the digital asset’s strengths to enhance its payment solutions.
