thecryptobasic.com
Prominent figures in the XRP community have argued that the XRP tokens locked in escrow by Ripple have a fundamental role in turning the asset into a global reserve currency.
This sentiment came from Edward Farina, Head of Social Adoption for XRP Healthcare, and Versan Aljarrah, the founder of Black Swan Capitalist.
Recently, Farina and Aljarrah conducted a live session discussing XRP’s potential as a global reserve currency, a conversation that gained renewed attention following a recent report by The Crypto Basic.
In particular, the report highlighted statements from the CEO of a German venture capitalist firm, who asserted that XRP holds the promise of becoming a global reserve currency for facilitating cross-border payments.
Meanwhile, Farina and Aljarrah introduced a new angle to the discourse by claiming that XRP tokens locked in escrow could serve the purpose of a reserve currency.
The $XRP escrow has a FUNDAMENTAL role in turning $XRP into a Global Reserve Currency. pic.twitter.com/OVwz8i9l2H
— EDO FARINA 🅧 XRP (@edward_farina) March 1, 2024
The Role of Escrowed XRP
During the conversation, Aljarrah explained that Ripple’s decision to lock billions of XRP tokens in escrow aimed to regulate the asset’s supply.
Aljarrah underscored that Ripple’s monthly release of XRP is a deliberate strategy to ensure a consistent asset supply, enabling a predictable distribution of XRP to enhance liquidity in the market.
He argued the move facilitates smoother transactions and trading activities without causing significant fluctuations in the asset’s price.
In his words:
“By maintaining liquidity, Ripple is able to facilitate the smooth functioning of the XRP ecosystem.”
Furthermore, Aljarrah highlighted that this approach makes XRP more appealing to investors, traders, and potential partners.
Besides, he noted that the concerns around Ripple’s escrow release hurting XRP’s price performances are misplaced. He urged enthusiasts to look at the broader perspective rather than the short-time price fluctuations.
Farina, echoing Aljarrah’s viewpoint, further emphasized the significance of the XRP tokens held in escrow by Ripple.
He addressed the widespread speculation regarding Ripple potentially burning all the XRP in escrow. Farina dismissed it as implausible, emphasizing that the escrowed tokens have a pivotal function.
Expanding on this notion, Farina speculated that if major institutions like the IMF or the Bank of International Settlement had acquired a substantial portion of the escrowed XRP years ago, it could lead to the conclusion that XRP was always intended to serve as a global reserve currency.
Farina pointed out that, by definition, a reserve currency is an asset “held in substantial amounts by central banks.” However, he cautioned that this perspective remains speculative and lacks factual evidence.