Forbes has criticized Ripple’s business model and adoption, claiming that it focuses on selling more XRP than it purchases.
Forbes questioned the adoption and growth of Ripple, a crypto company known to flaunt its payment infrastructure and growing customer base.
Martin Walker, the director of banking and finance at the Center for Evidence Based Management, told Forbes:
Ripple continues putting huge efforts into promoting the story they are improving remittances and cross border payments but whenever information about the reality comes out, is it’s all about selling XRP.”
Ripple Selling XRP Through Tranglo?
The author of the article, John Hyatt, used the Malaysian payment company Tranglo as an example to prove his narrative. Tranglo is one of the largest clients that utilizes Ripple’s On-Demand Liquidity (ODL) product.
Through ODL, Ripple provides its clients with XRP to facilitate instant cross-border transactions. Clients can pay back XRP’s worth to Ripple in cash.
The news site alleges that Ripple is indirectly using ODL to dump the coin in the open market.
Massively Profitable Business
Tranglo is a key client of Ripple, but the latter has a 40% ownership stake in the former. Also, according to the Malaysian company’s filings, just 8% of its customers choose to settle payments with XRP.
Furthermore, Global E-Money Alliance, a financial services-related company in Hong Kong, is responsible for 73% of Tranglo’s XRP-related revenue.
Interestingly, Global E-Money Alliance’s chairman, Alex Kong, is a board member at Tranglo. This raises the question if Ripple utilizes ODL to dump its bag of XRP.
Former Ripple employees told the news site that the company is “probably not” profitable in its software business. But, “they’re massively profitable” in terms of selling XRP.
Ripple as Created to Distribute XRP: CTO
Lastly, Ripple’s Chief Technology Officer (CTO) David Schwartz clarified, “At least in my view, Ripple was created to distribute XRP as broadly as possible and, with luck and if necessary, be able to generate enough revenue from sales (or things like sales) of XRP to sustain its operations.”
However, the community questioned the CTO, “What do you feel would be greater in value for Ripple: selling its service to institutions, or selling XRP purely and in general?”
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