Key Takeaways
- Ripple Labs is reportedly organizing a major fundraising effort through a Special Purpose Acquisition Company (SPAC) to purchase $1 billion worth of its native XRP token for a new digital asset treasury.
- Ripple is already a major XRP holder, with 4.5 billion tokens in its stash and an additional 37 billion XRP locked in an on-ledger escrow, released monthly.
- The plan follows Ripple’s recent $1 billion acquisition of corporate treasury management company GTreasury, aimed at providing infrastructure to manage digital assets for corporate clients.
Ripple Labs is poised to solidify its dominance over the XRP ecosystem with a reported plan to purchase a substantial $1 billion worth of its native token for a new digital asset treasury. This ambitious funding initiative is reportedly being organized through a Special Purpose Acquisition Company (SPAC), an increasingly popular method for raising capital for public market ventures.
The new Digital Asset Treasury (DAT) would be comprised of the newly acquired XRP, supplemented by a portion of Ripple’s existing stockpile. The exact terms and final details of the transaction are still being negotiated, but the move signals a major strategic emphasis on holding XRP as a core treasury asset for the company’s future operations.
Ripple Already a Significant XRP Holder
Ripple Labs is far from a new player in holding XRP. According to its May market report, the company already holds over 4.5 billion XRP in circulation. This represents a substantial portion of the total circulating supply, which currently exceeds 59 billion tokens.
The reported $1 billion purchase would allow the company to acquire approximately 427 million additional tokens, further concentrating its control. Moreover, Ripple holds a massive 37 billion tokens locked in an on-ledger escrow, which is released monthly, some is sold, and the remainder is returned to escrow.
The new treasury plan closely follows a major strategic business move: the $1 billion acquisition of GTreasury, a corporate treasury management company. This deal provides Ripple with the necessary infrastructure to help corporate clients manage various digital assets, including stablecoins and tokenized deposits, which can also be used to generate yield.
Deal Would Make Ripple the Leading XRP Treasury
While Bitcoin and Ether lead the institutional crypto treasury race with companies holding over $152 billion in BTC and $23 billion in ETH, XRP has seen slower corporate adoption. Ripple’s planned $1 billion purchase is a pivotal move intended to accelerate its asset’s uptake.
If the deal goes through, it would cement Ripple’s position as the leading entity in the XRP treasury space. The news comes as other companies also announce their intent to build XRP-centric reserves, though on a smaller scale.
These include Singapore-based Web3 company Trident Digital Tech Holdings, which plans an XRP treasury of up to $500 million, Chinese AI firm Webus allocating $300 million, and VivoPower targeting a $100 million XRP reserve. Ripple’s move is a clear signal that the company intends to lead the institutional adoption of its native token.
Final Thoughts
Ripple’s reported plan to buy $1 billion in XRP for a new treasury, organized via a SPAC, is a high-stakes move to boost the token’s institutional standing. Coupled with the GTreasury acquisition, this strategy is designed to position Ripple as the central facilitator for corporate management and ownership of XRP and other digital assets.
Frequently Asked Questions
What is a SPAC in this context?
A Special Purpose Acquisition Company (SPAC) is a shell company used as a vehicle to raise capital through a public offering for the purpose of a merger or acquisition, in this case, to buy a large amount of XRP.
How much XRP does Ripple currently have locked in escrow?
Ripple Labs has a total of 37 billion XRP tokens locked in an on-ledger escrow, which is released gradually each month.
What was the purpose of the GTreasury acquisition?
The $1 billion acquisition of GTreasury provides Ripple with the platform and infrastructure to offer corporate treasury management services for digital assets, including stablecoins and tokenized deposits.
