FinTech Firm Ripple Locks Up 55 Billion XRPbr>
FinTech payments firm Ripple has completed the lockup of 55 billion XRP, valued at $14.1 billion at current prices, in a cryptographically-secured escrow account. The company said this lockup eliminates any concern that Ripple could flood the market.
By securing the lion’s share of its digital asset, Ripple allows its investors to mathematically verify the maximum supply that can enter the market. The escrow feature enables parties to secure XRP for an allotted amount of time or until specific conditions are met. An XRP sender will be able to put conditions on exactly when a payment can be completed, so the payment remains cryptographically locked until the due date.
Ripple said they used escrow to establish 55 contracts of 1 billion XRP each that will expire on the first day of every month through 54 months. The XRP will become available for Ripple’s use as each contract expires. The company will use XRP for incentives to market makers who offer tighter spreads for payments and selling XRP to institutional investors. It will return unused XRP at the end of each month to the back of the escrow rotation.
“This move underscores Ripple’s commitment to building XRP liquidity and a healthy and trusted market,” the company said in a blog. “Long term, the value of digital assets will be determined by their utility. XRP has emerged as the only digital asset with a clear institutional use case designed to solve a multi-trillion dollar problem – the global payment and liquidity challenges that banks, payment providers and corporates face.”