- Ripple has purchased $45.5 million worth of XRP tokens to support its new XRP remittance service: ‘Line of Credit’.
- Line of Credit allows Ripple’s clients to borrow funds in XRP quicker and easier than traditional alternatives.
- With Line of Credit, Ripple is seeking to increase financing efficiency as well as bolster its XRP remittance services.
Ripple purchases tens of millions of dollars worth of XRP to support their new XRP remittance service.
In Q3, Ripple purchased over $45.5 million worth of XRP according to their latest quarterly market report.
The purchase was made, in part, to support markets, but a sizeable portion will also go towards supporting Ripple’s new XRP remittance service: ‘Line of Credit’.
The new Line of Credit service allows Ripple On Demand Liquidity (ODL) clients, such as financial institutions and money service providers, to take out loans in Ripple’s token, XRP, for a one-time fee.
This, according to Ripple, will be a quicker and more efficient service than traditional financing options. Firms will be able to use the new capital to invest in new markets and grow their customer base
Access to liquidity via leverage in financial markets is one of the common sources of market inefficiency, as the application and approval process is normally done manually.
With this new service, Ripple is seeking to source liquidity for its ODL service from “the open market, not just internally”.
The new service has received positive feedback, despite only being in beta stage, according to Ripple. However, there are no details of said feedback, nor are there details of the size of the beta group.
In other news, Ripple continues XRP sales, with OTC sales increasing by 10% in Q3, a sign that could suggest Ripple is planning to onboard new institutional clients.
Its recent partnership with remittance giant Moneygram has seen it invest over $9.3 million in the firm in return for it supporting its ODL service.
Reaction to these actions by Ripple has varied. Some in the XRP community welcome the investment and partnerships, suggesting it shows XRP has real commercial use. Others, however, are concerned that these resources are being given away with no regard for the value of the XRP token itself.
Many point out that the only reason Ripple has the resources to spend is that the community has supported the token through thick and thin.
Though the development of XRP remittance services is undoubtedly a good thing, Ripple has to be mindful of the community that supports it.
XRP currently trades at $0.257 at the time of publishing.