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Returns Ripple Buyback Discussion
The pope’s return coincides with optimism that the Ripple vs. The infamous SEC is ending this year.
At the same time, discussions around the controversial Ripple buyback theory were renewed after influential Ripple Labs contributor and securities attorney Jimmy Vallee remind everyone that an XRP buyback could be made if Ripple’s legal battle with the SEC ends in the company’s favour.
The Ripple buyback theory, introduced by Jimmy Vallee in 2021, hinges on the thesis that XRP could become the world’s next reserve currency. According to him, the current financial system, especially in the US, whose dollar is the world’s reserve currency, faces trillions of dollars in debt, which is unsustainable.
The world economy may be destined to move towards a new financial system to solve the debt problem. The new financial system must have liquid and scalable digital assets to support total global wealth.
In theory, the XRP bridge currency can be an asset. But to make this happen, the government must first hold large amounts of XRP to guarantee liquidity.
Theoretically, this could be achieved by purchasing XRP supplies from the secondary market. The precedent was set in the Great Depression when the US government purchased gold from citizens to fill empty federal reserves.
To keep the market stable, XRP must have a fixed price. This means that if XRP covers all world wealth, its market cap should be a quadrillion dollars. According to Ripple’s buyback theory, the price of XRP, with a limited supply of 100 billion, could be between $37K and $50K.
The theory generated a lot of discussion throughout the XRP community. Critics claim that is unattainable, especially when XRP comes with centralized enterprise Ripple Labs, and governments are experimenting with their CBDCs. Countries like China are working to make their fiat the world’s reserve currency.
In addition, legal boundaries are getting stronger around the world, prevent institutions from buying and holding large or any amount of digital currency.
Ripple Labs and XRP must strive to become global reserve currencies. To even establish XRP as the primary bridge currency for international value transfers, companies must first overcome their main legal hurdles with the SEC.
While the XRP community is waiting for the Ripple vs. SEC ends this year, XRP whales start to move. Since whale activity is often an indicator of greater brewing, it’s worth saving watching their movements. Even if a significant XRP price move hasn’t materialized yet.
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