Deep-dive into XRP
XRP is a cryptocurrency that runs on a blockchain called XRP Ledger.
The basic entities
Ripple is a private technology company that operates the RippleNet network.
RippleNet is used by financial institutions to send money globally within seconds at a very low fee.
XRP is a cryptocurrency that runs on a blockchain called XRP Ledger. Validators agree on the order & outcome of XRP transactions every 3 to 5 seconds. The blockchain handles 1500 transactions per second.
Traditional international payments require businesses to maintain accounts with the necessary funds in the target currency. This is expensive and locks up money.
RippleNet uses XRP to quickly convert to different currencies. This enables payments to be sent & received rapidly in local currency for each side of the transaction.
Ripple v SEC Verdict
Ripple (XRP) got a partial victory in the ongoing debate on whether XRP is a security under US laws.
The case was filed by the US Securities and Exchange Commission (SEC) in December 2020 alleging that Ripple was offering an unregistered security.
The case claims that Ripple violated federal securities laws by selling 14.6 billion XRP tokens for over $1.38 billion without registering their offers & sales with the SEC.
The XRP sales were of 2 types:
1. Institutional Sales - Ripple sold XRP directly to institutional buyers & hedge funds pursuant to written contracts.
2. Programmatic Sales - Ripple sold XRP on digital asset exchanges "programmatically" or through the use of trading algorithms. These sales were blind bid/ask transactions in which Ripple did not know who was buying the XRP, and the purchasers did not know who was selling it.
In a 13 July preliminary ruling, a New York court ruled in favor of the SEC regarding Ripple's direct institutional sales, and in favor of Ripple regarding programmatic sales on digital asset exchanges.
The Court will now issue a separate order setting a trial date and related pre-trial deadlines.
Ripple's CBDC Platform
Ripple's Central Bank Digital Currency (CBDC) Platform enables minting, managing, transacting, and destroying CBDCs & stablecoins.
Here's how it works:
APIs enable the integration of the CBDC Platform into existing technology systems.
Banks use the platform to mint CBDCs / stablecoins.
Issuers directly send CBDCs / stablecoins to authorized accounts operated by approved participants.
Transactions are settled in 2 to 3 seconds. Interoperability is possible for cross-asset & cross-border transactions.
Participants can return funds to the issuer in exchange for fiat currencies.
Supply can be controlled through the secure destruction of currency.
Core metrics of XRP
Price: $0.8
All-Time High (Jan 04, 2018): $3.84
All-Time Low (Jul 07, 2014): $0.002802
Market cap: $42 billion
Circulating supply: 52.5 billion XRP
Total supply: 99.9 billion XRP
Max. supply: 100 billion XRP
Volume (24h): $3.3 billion
Volume/Market cap (24h): 7.86%