Brad Garlinghouse, CEO of Ripple, a company focused on blockchain technology for financial transactions, recently spoke on CNBC about the long-term viability of cryptocurrencies.
JackTheRippler (@RippleXrpie), a prominent community figure, shared a clip where Garlinghouse highlighted utility as a crucial factor determining a token’s value, specifically focusing on the problem it solves, the scale of the problem, and the existing customer base.
“One of the things we all have to remember is that the value of a token over the long term is going to be driven by its utility,” Garlinghouse stated in the interview. “What problem is it solving? How big is that problem?”
Read Also: Brad Garlinghouse Says Ripple Would Settle with U.S. SEC on One Condition
The crypto market is full of cryptocurrencies without defined purposes. This sets XRP apart in the highly speculative market, and Garlinghouse emphasizes a focus on real-world application, contrasting it with what he perceives as market hype.
“There’s no question that there’s a lot of hype in this system, and I don’t think that’s a good thing,” he added. Analysts are currently bullish on XRP, and the token’s potential to capture a huge section of the financial market is a major driving force for their attitude.
The CEO highlighted XRP’s role in transforming the banking sector, stating, “For Ripple, we use this digital asset called XRP to settle liquidity needs between banks,” Garlinghouse drew attention to the total figure held by banks around the world, which he pegs at $27 trillion.
He stated that these banks use this money to make payments to each other, but a digital asset can replace those payments and handle them more efficiently and at a lower cost.
He said, “Our view is you can use a digital asset like XRP to do that in real-time. Because XRP has been so efficient, it settles a transaction in about 3 seconds.”
The traditional system Garlinghouse describes requires banks to hold significant reserves to ensure smooth international transactions. XRP offers a potential solution by streamlining the process and reducing settlement times from days to seconds.
Read Also: Attorney John Deaton Explains Why Ripple Will Want to Settle with SEC if it Wins XRP Lawsuit
This focus on utility aligns with a growing sentiment within the financial sector. Established institutions are increasingly interested in cryptocurrencies with demonstrably valuable applications, particularly those that improve existing financial systems.
While Garlinghouse champions XRP’s utility in the banking sector, his comments hold broader relevance for the crypto market. His emphasis on problem-solving suggests a potential shift in the crypto industry toward cryptocurrencies with clear use cases.
Meanwhile, another Ripple executive recently discussed the company’s prioritization of utility and adoption over short-term price increases, and this strategy places Ripple at the front of this potential market shift.
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