Does RippleXRP help banks to facilitate money transfers?

Ripple labs entered the financial market by resolving a problem plaguing global banks for years. The company provided financial institutions with a solution that would facilitate seamless money transfers using blockchain technology. Ripple secures transactions for leading financial institutions, including Bank of America and JP Morgan. Ripple XRP’s price has not increased despite the partnership with major banks and fintech firms.

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Why XRP does not surge when Ripple partners with major banks?

RippleLabs has a partnership with banks, but they don’t need to use XRP. Ripple provides two distinct products: RippleNet, and On-Demand Liquidity The ODL is a group of primarily distinct (ODL).

XRP, used to settle fees and as a gas in the ODL for money transfer is key. This feature is mainly used by developers who need XRP for their everyday business.

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RippleNet is used by global banks to seamlessly transfer money without having XRP. ODL can be used to solve liquidity problems, but this is not a problem for global banks. There are plenty of funds and demand is high for transactions that can be completed quickly without interference.

There is therefore no correlation between the price of XRP in charts and banks’ use of Ripple services. They are not related and don’t help to boost the value of the token. The banks don’t want to take any risks in holding XRP for transactions, as this goes against their purpose. The banks don’t require another intermediary (XRP), as they themselves are the one who is facilitating the transaction.

The next time that you ask yourself why XRP doesn’t rise even though it has partnered with leading banks, the answer is this. Banks are at risk of losing money if they hold XRP for transactions. The token could even drop more than 10% within a single day.