Standard Chartered, one of the world’s largest banks, announced yesterday that it has launched institutional custody services for Ripple’s stablecoin RLUSD through its Dubai International Financial Centre branch.
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This situation has also increased enthusiasm for XRP, and the on-chain analysis platform Santiment has evaluated the RLUSD news and its potential impact on the XRP price.
At this point, Santiment noted that the growth of Ripple’s stablecoin RLUSD does not automatically translate to a price increase for XRP. According to Santiment, the real determining factor is not the stablecoin’s market capitalization, but rather the extent to which the XRP Ledger network is used by financial institutions.
RLUSD Grows While XRP Declines!
In its latest analysis, Santiment noted that while RLUSD’s market capitalization increased, XRP fell, indicating that the two assets did not move in tandem. According to Santiment, this pattern shows that there is no direct correlation between the growth and price movements of the two assets.
The increasing adoption of RLUSD alone does not guarantee a rise in demand for XRP. The fact that the stablecoin can be used on different blockchains, and that financial institutions can use RLUSD for payments or collateral without directly purchasing XRP, are the main reasons for this divergence.
The Decisive Factor for XRP: Network Usage!
At this point, Santiment noted that wider adoption of RLUSD could benefit the XRP ecosystem in the long run. According to Santiment, if banks, institutional investors, and trading firms begin using RLUSD on XRPL, network transaction volume and liquidity could increase. Such a development is considered a factor that could support the XRP ecosystem, and burning small amounts of XRP in transactions on the XRP Ledger is also among the potential consequences of network usage.
However, Santiment notes that this situation alone is not expected to have a significant impact on the XRP price.
Finally, Santiment stated that Standard Chartered’s move was significant. According to Santiment, while these moves expand RLUSD’s role in areas such as institutional custody and collateral trading, the actual impact on XRP’s price will depend on whether network usage and institutional demand increase significantly.
*This is not investment advice.
Continue Reading: Will Standard Chartered’s move on Ripple boost the XRP price? Santiment’s assessment!