Ripple CTO Suggests Other Income Could Reduce XRP Selling Pressure

TLDR

Ripple CTO says alternative income could ease pressure to sell XRP.
Ripple has historically relied on XRP sales to generate revenue.
Schwartz supports reducing XRP dependency through other income models.
Ripple is developing a stablecoin, RLUSD, to diversify revenue streams

Ripple’s Chief Technology Officer, David Schwartz, has suggested that the company’s growing alternative revenue streams may reduce its reliance on selling XRP. As Ripple continues to develop products like the RLUSD stablecoin and expand enterprise services, Schwartz believes this shift could ease financial pressure during market downturns. His comments address ongoing investor concerns about how large-scale XRP sales might affect the token’s price and Ripple’s long-term stability.

Ripple’s XRP Sales Model Under Discussion

David Schwartz, Chief Technology Officer at Ripple, recently stated that new revenue models could reduce Ripple’s need to sell XRP. He made these comments in response to concerns about Ripple’s dependency on XRP sales, especially during price drops.

“Wouldn’t you think other sources of income reduce this pressure?” Schwartz asked in a social media post, referring to the need to sell XRP when the market weakens.

Ripple has used its large XRP holdings to fund operations, releasing set amounts from escrow each month. This mechanism supports company expenses but raises investor concerns about downward price pressure.

History of XRP Sales Supporting Ripple’s Revenue

Ripple’s revenue model has largely depended on the sale of XRP. Past reports, including one from the Financial Times, have indicated that the company might not be profitable without selling XRP.

In earlier statements, Schwartz also acknowledged that XRP accounts for almost all of Ripple’s income. The company sells XRP directly or programmatically to the market, and proceeds help cover operational costs and growth initiatives.

Ripple releases 1 billion XRP from escrow monthly. While a portion is returned, the rest funds company operations. Because of this cycle, the company’s financial health has been closely tied to XRP’s market performance.

Efforts to Reduce Dependency on XRP

Ripple has been working to shift away from over-reliance on XRP sales. This includes expanding its enterprise services and launching new products like RLUSD, a stablecoin that could open new revenue opportunities.

The RLUSD stablecoin is aimed at supporting use cases in payments and DeFi. Its development signals an attempt to bring more stable, recurring income sources to Ripple’s business.

Enterprise solutions such as RippleNet and On-Demand Liquidity (ODL) also contribute to this effort. These services are offered to banks and financial firms for cross-border transactions using blockchain.

While some critics suggest that shifting focus away from XRP could make it seem like a secondary asset, Schwartz believes the opposite. He argues that multiple income sources could make Ripple more stable and reduce the need for forced XRP sales in bearish markets.

Market Reaction and Long-Term Strategy

The price of XRP has shown resilience in the market, rising 4.80% in recent trading. Investors continue to monitor Ripple’s financial strategy and how changes may affect the supply dynamics of XRP.

Ripple’s ongoing litigation with U.S. regulators also brings more focus to its financial operations. While Schwartz did not directly address legal matters in his comments, the reduced dependency on XRP may help separate Ripple’s business model from regulatory scrutiny tied to token sales.

Ripple’s move toward diversification may improve its long-term stability. By relying less on asset sales, the company may maintain a steadier financial position regardless of market conditions.

As Schwartz puts it, income from multiple sources might help Ripple make more balanced financial decisions, especially when market prices are low.

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