Ripple Secures National Bank Charter Approval, XRP Demand Outlook Worries
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: Fool
- Charter Approval: Ripple has secured conditional approval for a national bank charter, which has attracted optimistic investors despite XRP's nearly 40% decline from its July peak, indicating market confidence in Ripple's future.
- Adoption Issues: While RippleNet offers faster payments and lower costs, banks can adopt the technology without using XRP, creating uncertainty around XRP's demand outlook and prompting investors to reassess their investment logic.
- Liquidity Constraints: Ripple's On-Demand Liquidity (ODL) service uses XRP as a bridge asset for cross-border transactions, but adoption is currently limited to smaller institutions, with major banks not utilizing it, leading to a disconnect in XRP's investment thesis.
- Stablecoin Impact: The approval of Ripple's RLUSD stablecoin could replace XRP as the primary bridge asset in ODL transactions, further undermining XRP's market position and posing potential risks for price declines that investors should be wary of.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
