The notion that possessing just 100 XRP could become a rarity is drawing attention, especially following a recent analysis by Edo Farina. He argues that this isn”t mere speculation but rather a conclusion grounded in mathematical reasoning.
Currently, XRP is trading at $1.37 amidst a broader market slowdown, but Farina emphasizes that the present price is not the primary concern. Instead, he focuses on who will hold the XRP supply in the future.
The Bank Liquidity Theory
Farina”s argument is anchored in the intricate workings of global banking systems. Banks maintain large sums in nostro accounts, which are prefunded reserves utilized for settling cross-border payments. According to his analysis, trillions of dollars are idly sitting in this system worldwide. If XRP were to be adopted as a bridge asset to replace this setup, significant reserves would be necessary for financial institutions.
His rough calculations suggest that if approximately 150 central banks held 100 million XRP each, that would absorb around 15 billion tokens. Furthermore, considering about 25,000 private banks each holding 1 million XRP, another 25 billion tokens would be locked away. This scenario totals roughly 40 billion XRP, nearly half of the overall supply of 100 billion.
While the feasibility of these figures can be debated, Farina”s key takeaway is clear: institutional holdings could significantly reduce the available liquid supply.
CBDCs, Wallet Reserves, and Retail Demand
Farina extends his analysis beyond banks, introducing the potential effects of consumer adoption through central bank digital currencies (CBDCs) and stablecoins that might operate on the XRP Ledger. If even a small percentage of the global populace required XRP for wallet operations or to maintain reserve balances, the cumulative demand could escalate quickly.
For instance, if 800 million users each held just five XRP to manage their wallets, that would remove 4 billion tokens from the circulating supply. Additionally, each transaction on the XRP Ledger incurs a minor burn of XRP, further contributing to the gradual decrease in total supply over time.
Supply Shock or Stretch Scenario?
The bullish perspective is straightforward: if institutions lock away their reserves, retail users maintain minimum balances, and transaction volumes consistently chip away at the supply, the number of tokens available for trading would dwindle. In such a scenario, prices would likely need to adjust to align with the shrinking availability against steady or increasing demand.
The counterpoint is equally clear. These projections hinge on widespread institutional uptake, coordinated accumulation, and significant retail usage, a complex outcome to achieve. Global banks typically act with caution, governments tend to move slowly, and crypto adoption does not always follow a predictable trajectory.
Nevertheless, this perspective is thought-provoking as it shifts the focus from merely questioning whether XRP can achieve a particular price to considering how much of its supply might realistically remain liquid if major players begin to hold it over the long term. Should this shift occur, owning 100 XRP may no longer seem like a trivial amount.
At present, this theory remains one rooted in the potential for structural demand.
