Crypto enthusiast Luke Thomas recently shared a rumor that Ripple plans to custody its entire XRP in Escrow for a stablecoin RLUSD. We will explore current XRP escrow dynamics, the proposed use of XRP for RLUSD reserve, and the potential impacts for Ripple.
Current XRP Escrow Dynamics
Ripple currently holds approximately 38 billion XRP in escrow, locked until April 2027. Each month, one billion XRP is unlocked, with the company typically locking about 80% back into escrow while selling the remaining 20% on the secondary market. In 2024 alone, Ripple sold 3 billion XRP, generating approximately $3.46 billion. The escrow mechanism prevents market flooding, sustaining XRP's price stability.
Proposal: Using Escrow XRP for RLUSD Reserve
Thomas proposes dedicating 30 billion XRP from escrow as a reserve for RLUSD, a new stable digital asset. This involves establishing a reserve where Ripple would lock 30 billion XRP into a smart contract or similar mechanism. RLUSD would be a stablecoin pegged to USD, distributed among partners to enhance cross-border transactions.
Potential Impacts on XRP and the XRPL
If implemented, the strategy could offer benefits such as reduced XRP supply, potentially increasing demand and value, enhanced XRPL liquidity with active RLUSD use, and bolstered trust in Ripple and its financial products.
Should this RLUSD reserve proposal come to fruition, it could mark a significant step for Ripple, enhancing its role in the financial ecosystem. This strategy could strengthen trust in XRP and Ripple, further increasing their importance globally.
