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Ripple CEO: We can't make money without selling XRP.

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Ripple CEO: We can

Ripple (XRP) unlocked 1 billion XRP from its official escrow account on March 1st, worth approximately 226 million USD. Despite Ripple's official statement to suspend its previous "programmatic" sales, it still raised questions within the community about the monthly XRP sales plan. What was even more surprising was Ripple CEO Brad Garlinghouse's statement in the Financial Times, stating that the company cannot turn a profit without selling XRP.

Table of Contents

  • Ripple CEO Admits Profit Comes from XRP Sales
  • Ripple CTO: Ripple May Issue Stablecoins

Official Holding Account Controversy

Since the birth of XRP, Ripple has been criticized for controlling 55% of the total circulating supply, facing allegations of skewed token distribution and overly centralized mechanisms. Over the past few years, Ripple has been accused of selling billions of tokens to boost institutional profit, forcing XRP holders to endure significant losses.

Ripple CEO Brad Garlinghouse, in an interview with the UK's Financial Times on February 28, claimed that Ripple's cash flow is positive. It remains unclear how much of the cash flow comes from service fees and how much comes from XRP sales. He stated:

Well, XRP sales are one of those revenue sources. I don't know how to answer that because if you took away the software revenues, that would reduce our profitability; if you took away the XRP sales, that would also reduce our profitability. I don't think about it as one thing.

However, Garlinghouse later admitted:

If we didn't sell XRP tokens, we wouldn't have a profitable or cash flow-positive company, I've said that before.

Renowned analyst Luke Martin also pointed out on Twitter that selling XRP to everyone is how Ripple maintains its operation.

The only consolation is that according to Ripple's Q4 2019 report, Ripple claims to have suspended "programmatic" sales from the escrow account, focusing only on over-the-counter (OTC) sales with specific strategic partners, stating that these "partners" will enhance XRP's utility and liquidity.

As the first quarter of 2020 has not ended, Ripple has not disclosed its sales schedule for 2020.

Spending Big to Drive Adoption

RippleNet is a financial services network built by Ripple based on blockchain technology. Since its creation in 2012, Ripple has attracted many financial partners, with the National Bank of Fujairah, one of the major banks in the United Arab Emirates, announcing its participation in RippleNet.

Ripple CTO David Schwartz also recently stated that efforts are being made to develop new features for RippleNet, which may include issuing tokens backed by real assets on the XRP blockchain, such as stablecoins.

Ripple has not been stingy in providing financial support for adoption. Earlier, reports indicated that Ripple paid $11.3 million to the remittance company MoneyGram for market development fees to use its payment system RippleNet, and announced an investment of up to $50 million in MoneyGram in June last year.

Related Reading

  • Ripple Escrow Wallet Releases Another 1 Billion XRP
  • Users Pay Fees! Ripple Paid MoneyGram $11.3 Million in Market Development Fees

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