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Ripple CTO Explains XRP Burn Mechanics Behind Ripple USD Stablecoin
In a recent statement, Ripple’s Chief Technology Officer (CTO) clarified the burn mechanics of XRP in relation to the company’s upcoming stablecoin, RLUSD. The announcement has sparked both excitement and curiosity among crypto enthusiasts.
While some may be thrilled at the prospect of XRP burning, others are left wondering what this means for the token’s total supply.
To put things into perspective, Ripple recently made headlines by transferring 580 million XRP to an escrow account. This move has raised speculation about potential burn mechanisms and its implications on the overall supply.
In a statement, the CTO cleared up some misconceptions regarding these actions. It appears that the transfer is not directly related to XRP burning but rather part of Ripple’s efforts to build a robust reserve for RLUSD.
The CTO emphasized that any significant reductions in XRP’s total supply would be reflected in its dynamics, such as altering liquidity and influencing price movements. However, an analysis of global systems like SWIFT, Visa, and Mastercard – with over a billion transactions per day – shows that this scale of activity would burn around 0.0075% of XRP’s supply annually.
In other words, any XRP transferred for RLUSD stablecoin operations won’t have a substantial impact on the token’s overall supply.
The CTO’s clarification comes as Ripple prepares to launch its USD-pegged stablecoin, RLUSD. This development may prove crucial in expanding the reach and utility of the XRP Ledger ecosystem.
Source: u.today
