The Separation of Ripple and XRP
Ripple control of a good chunk of XRP, while not a bad thing, has been the subject of increased scrutiny and criticism in the recent past. The fact that most people are attracted to cryptocurrencies because of the promise of decentralization has not gone well with some. With Ripple Labs controlling a good chunk of XRP coins, there is fear that the firm wields too much power making it a central authority in a project that is supposed to be decentralized in all aspects.
Ripple, the company, has in the recent past gone on a rebranding drive, trying to emphasize its relationship with the digital asset XRP. The clarification comes at a time of mounting regulatory pressure as regulators call for more clarity on how the two are related.
The unveiling of a new logo for XRP token marks the first step in Ripple moving to distinguish itself from the token. The new logo emphasizes the need for XRP operating independently. However, the two will still maintain close ties.
Ripple-XRP Separation Consequences
Separation is a good thing in that it will lead to a clear distinction between the two entities, something that regulators have been calling for. Ripple is currently entangled in three legal cases all of which have been thrown into disarray on regulators and authorities struggling to understand how the two are different and independent from each other.
Ripple and its products led by xCurrent and xRapid won’t be affected in any way by the separation. xCurrent does not use XRP. xRapid on the other hand only uses the cryptocurrency as an exchange mechanism and not for storage of value.
Separating XRP from Ripple should also help alleviate the centralization concerns that many people have come to question. Ripple has already made it clear that even if it holds a majority of XRP coins, it does not mean that it controls it or have an impact on its market cap. Talk of separation should thus help alleviate the concerns allowing market participants to treat XRP just like any other decentralized cryptocurrency.
While there have been concerns that separation could see Ripple dumping a lot of the XRP coins, it currently owns in the market, that won’t be the case. The people at Ripple Labs are smart enough to understand that the success of XRP as a cryptocurrency would be to their benefit thus won’t do anything that would hurt its market value.
There are a number of institutional investors who have been’ skeptical about investments in XRP, on concerns of its association with Ripple Labs. Separation should clear the wave of uncertainty, especially on the three legal cases in court, allowing investors to be in a position to value the token for investment purposes.
XRP has seen its value disintegrate in the recent past on its sentiments in the market taking a hit as a result of regulators alleging that it was issued as an unlicensed security Offering. Breakaway from Ripple could see the matter put to rest on regulators having a clear understanding of what the altcoin is all about. The coin price should thus receive a boost on the regulatory pressures easing off.
Ripple is one of the most successful payments and exchange platform that will have a big impact on financial transactions in the future. XRP on the other hand, the underlying digital currency powering the network, should see its value continue to tick higher as more financial institutions use the Ripple network to facilitate cross-border transactions.
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