XRP Value If Global Banks Use It for Transfers

XRP continues to gain traction in the global payments ecosystem, and many are wondering what its value could become if every major bank adopts it for cross-border payments. As Ripple enhances its offerings with Ripple Payments, formerly known as ODL (On-Demand Liquidity), XRP’s potential use case in international banking has come under serious consideration.

Ripple Payments enables financial institutions to leverage XRP as a bridge currency, removing the necessity to fund accounts in foreign currencies before sending international remittances. This system reduces settlement times, increases transparency, and significantly cuts transaction costs—a proposition that’s both timely and efficient in today’s digitized finance world.

XRP also received a crucial boost in 2023 following a legal partial win in the U.S., giving the asset more regulatory clarity. This development enhanced the token’s credibility, making it a more appealing option for financial institutions in the United States that had previously hesitated due to legal uncertainties. With legal resolution nearing completion, discussions around the possible mainstream adoption of XRP in banking circles have intensified.

Given this renewed momentum, curiosity has swirled about what XRP’s valuation might look like under different models of widespread banking adoption. To explore this, ChatGPT considered multiple adoption scenarios, each built on a different set of financial assumptions.

High Adoption Scenario: Capturing 10% of SWIFT’s Market

In one of the most optimistic projections, XRP was modeled as capturing 10% of the $150 trillion processed annually by SWIFT. With a usage rate (or velocity) of three times per year, the system would require $5 trillion worth of XRP in total. Given a 60 billion token supply, this would place XRP’s value at approximately $83.33 per unit. This assumes global adoption and frequent turnover of tokens in settlement flows.

Moderate Scenario: 5% of the $200 Trillion Cross-Border Market

Another scenario delved into the broader cross-border payments landscape, accounting for retail exchanges, corporate transactions, and remittances—estimated at around $200 trillion annually. If XRP were used to settle just 5% of this volume, and each token turned over five times a year, about $2 trillion of XRP would be in active circulation. This model priced each XRP at $33.33, representing a more tempered yet still bullish outcome.

Conservative Outlook: XRP Held as Bank Reserves

Taking a less aggressive approach, a third estimate looked at XRP being adopted more like a liquidity reserve among banks rather than a transaction medium. If 1,000 of the top financial institutions globally were to each hold $500 million in XRP as a buffer for settlements, the cumulative reserve would equal $500 billion. Distributed across the 60 billion tokens currently in circulation, this would place XRP at roughly $8.33 per token.

Understanding Token Velocity

One consistent factor across all valuation methods is XRP’s velocity. The faster XRP changes hands in each financial year, the smaller the token supply needed to support the system—essentially putting downward pressure on price. Conversely, slower turnover would require a larger reserve of tokens, increasing scarcity and, by extension, value.

Related: XRP Price: $12M Max Pain for Bears

These models clearly show that if XRP becomes integral to the financial sector’s cross-border infrastructure, its valuation could see a considerable rise. Depending on adoption level and usage intensity, the price of XRP could reasonably fall anywhere between $8 and over $80. While these numbers are speculative, they are derived from rational models showcasing real global market potential.