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The XRP role in the US digital asset stockpile raises questions in the token utility – does it belong?

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RIPPLE’S XRP (XRP), the third largest cryptocurrency of the market cap, has gained national recognition after President Donald Trump mentioned “important cryptocurrency” with BTC, ETH, Sol, and ADA as part of a planned US Strategic Crypto Reserve.

Trump’s Executive order On March 6 found a new structure for the Altcoins – the digital stockpile asset, managed by Treasury.

While the crypto community remains divided into whether the XRP is truly important as President Trump suggests, a closer look at Altcoin’s utility is warranted.

XRP’s potential paper in banking

Launched in 2012 by Ripple Labs, the XRP Ledger (XRPL) is designed for interbank arrangements. It first offered three business solutions: Xrapid, Xcurrent, and XVIA, all rebranded under the ripplenet umbrella. Xcurrent is a real-time messaging and settlement between banks, XVIA is a payment interface that allows financial institutions to send payments through RippleNet, and Xrapid, which is now part of on-demand liquidity (ODL), facilitating cross-border transactions.

Only ODL really needs XRP; Other services allow banks to use ripplenet without holding the token. This means that the Bank of Ripple technology is not always pushing for XRP prices.

Some of the world’s largest banks use Xcurrent and XVIA, including American Express, Santander, Bank of America, and UBS. There are fewer data on creatures that use ODL services enabled by XRP. Known adopters include SBI remit, a major Japanese remittance provider, and Tranglo, a leading remittance company in Southeast Asia.

XRP’s role in web3

XRP is also used as a gas token. However, unlike the Ethereum network, where the fees go to validators, a small amount of XRP is burned as an anti-spam mechanism.

The XRP role in the web3 is minimal. Unlike Ethereum, ripple does not support complex smart contracts or DAPPS. It only offers the basic web3 function, such as a token release mechanism and native NFT support under the XLS-20 standard, introduced in 2022.

The XRPL web3 ecosystem is small. Its moderate defi sector holds $ 80 million in total amount locked (TVL), according to Delete. XRPL tokens have a combined market cap of $ 468 million, according to XRPL.To. Most of these are tokens of Dex (solo) and memes (XRPM), as well as wrapped BTC and stablecoins.

To date, the XRPL web3 sector remains a niche and rides on a very smart contract platform such as Ethereum and Solana.

Crypto Pundits divide hair on XRP paper into a strategic reserve

Ripple labs representatives have long been promoting for equal treatment of cryptocurrencies, including CEO Brad Garlinghouse Re -consider This is January 27.

Garlinghouse said,

“We live in a Multichein world, and I’m promoting for a field playing instead of one token compared to another. If a government digital asset is created – I believe it should be industry representative, not just a token (whether BTC, XRP or anything).”

However, not all cryptocurrencies serve the same purpose. Bitcoin’s main role is a “geopolitically neutral asset like gold,” in words of crypto analyst Willy Woo. The purpose of the XRP remains less clear, but few in the crypto space will argue that it can be qualified as an independent currency.

This is mainly because of one of the uncomfortable aspects of the ripple – its permission of nature. Unlike Bitcoin or Ethereum, Ripple does not rely on miners or staked tokens to secure the network. Instead, it uses a unique node list – a group of trusted validators responsible for approval of transactions. As it optimizes speed and efficiency, it increases concerns about censorship, corruption, and security risks.

Bitcoin’s proponent and co-founder of Casa Jameson Lopp Not restrained When discussing the potential of XRP:

“There’s Bitcoin, then there’s a crypto, then there’s a ripple. Ripple attacked Bitcoin to a level rival only by BSV’s suits. Ripple clearly wanted CBDCs to power. They always focused on serving banks. Some projects are as antithetic to Bitcoin.”

No love lost between Bitcoiner and RIPP supporters, especially after ripple co-founder Chris Larsen cooperated with Greenpeace to fund Anti-Bitcoin campaign.

However, LOPP’s comparison with the CBDCs was weighing weight, given the allowable nature of XRPL. It reflects a common view of the crypto community that XRP acts like a banking tool than a truly independent cryptocurrency.

As the XRPL Blockchain sees widespread banking use, the XRP utility remains a point of concern. This is emphasized by the fact that approximately 55% of the 100 billion pre-mined coins are still held by ripple labs. This concentration has raised concerns about potential market manipulation and the long -term stability of the coin.

This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.