XRP has been on a significant upsurge in the past few weeks. Notably, the XRP price recently surged to $2.81, its highest market value since January 2018, marking a significant milestone in its price trajectory. Interestingly, the XRP price rally has seen it overperforming most cryptocurrencies and overtaking BNB, Solana, and Tether USDT in market cap ranking. As the XRP price momentum grows, another stimulant might be on the rise that would send it on a greater surge. Particularly, fresh speculation around Ripple’s use of its escrow reserves for RLUSD mints is drawing attention across the cryptosphere.
The RLUSD Minting Strategy And Ripple’s Escrow
Rumors are that Ripple, the payment technology company behind XRP, may be planning to use its escrowed XRP as the initial reserve for RLUSD minting. As the largest holder of XRP, Ripple currently has approximately 37.24 billion tokens in escrow, with a set portion of 1 billion XRP tokens unlocked every month.
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Meanwhile, RLUSD is Ripple’s new dollar-backed stablecoin that is expected to launch soon, with regulatory approval from the New York Department of Financial Services (NYDFS) anticipated on December 4.
According to a crypto analyst on social media platform X, this dollar-backed stablecoin could provide Ripple with a mechanism to sell RLUSD to its On-Demand Liquidity (ODL) partners, offering a significant boost in working capital. This approach could deliver two transformative outcomes for Ripple and the broader XRP Ledger (XRPL) ecosystem: a substantial liquidity injection and a controlled reduction in XRP’s total supply. Furthermore, it would provide utility for the locked XRP tokens in Ripple’s possession.
Game-Changing Implications For The XRP Price And XRPL
With RLUSD, Ripple would be entering a stablecoin market dominated by heavyweights like USDT and USDC. However, given its longstanding history with the crypto industry, Ripple might be in a good position to compete with other stablecoins.
If RLUSD becomes widely adopted, there will be an indirect demand for XRP, which will increase its utility. More demand for XRP in this context could positively affect its price. Additionally, the process of minting RLUSD might involve effectively locking up XRP tokens if used as escrows, resulting in a reduced circulating supply and further supporting price growth.
At the time of writing, XRP is trading at $2.74 and is currently up by about 12% and 90% in the past 24 hours and seven days, respectively. The rally follows intense whale accumulation, with wallets holding between 1 million and 10 million XRP collectively amassing over 679.1 million tokens in three weeks, according to data from on-chain analytics company Santiment.
Interestingly, this accumulation is currently valued at an approximate $1.66 billion. Such an accumulation trend could continue to push the XRP price on a positive path, with the next target being a break above $3 and a subsequent break into a new all-time high above $3.40.
Featured image created with Dall.E, chart from Tradingview.com
Source: https://bitcoinist.com/xrp-price-on-brink-breakout/