Ripple Labs has penetrated financial markets by solving key issues that have plagued the global banking sector for decades. With the help of blockchain technology, we provided our banking clients with products to seamlessly promote their products. Major financial institutions such as Bank of America and JP Morgan use Ripple’s services to secure transactions. Despite partnerships with top banks and fintech companies, Ripple’s XRP has barely skyrocketed in prices.
Why doesn’t XRP skyrocket when Ripple partners with major banks?
Even after banks expand their partnership with Ripple Labs, financial institutions do not need to deal with XRP tokens. Ripple offers two different products, Ripplenet and On-Demand Liquidity (ODL), which are primarily separated from each other.
To facilitate remittances using ODL, XRP plays a major role as it is used as a gas for settlements and fees. This is primarily used by developers and DAPP project makers, which XRP needs to do its daily business.
However, global banks use Ripplenet, which seamlessly promotes transfers without the need to retain XRP. ODL is used when liquidity issues are needed, but Global Banks do not have that issue. The funds are very wide and there is a demand for faster trading without interference.
Therefore, there is no correlation between banks using Ripple’s services and XRP prices on charts. Both are different from each other and never help the price of the token. Banks do not take risks by keeping XRP to facilitate transactions as they are contrary to the purpose of remittances. They don’t need another intermediary (XRP) because they are actually intermediaries between the two parties.
So next time you wonder why XRP isn’t rising even after it partners with Top Bank, this is why. Holding XRP in a transaction is dangerous for banks as it can lose a big chunk, as the token can drop by more than 10% in a day.
