Banks Delay High-Volume XRP Use Over Regulatory Risks
Cross-border liquidity provider XRP remains unused at scale by banks despite its technical capabilities. Crypto analyst Mr. Man and former Ripple director Navin Gupta attribute the hesitancy to current regulatory prudence: the Bank for International Settlements assigns a 1,250% risk weight to unbacked crypto assets, forcing banks to hold substantial capital. Until the BIS lowers this risk weighting, banks must continue using the US dollar as a bridge currency. Mr. Man highlights that once prudential standards adjust, XRP could replace dollar intermediaries in forex routes, speeding settlement and cutting costs. Gupta adds that Ripple’s software connects independent XRP markets—for example, converting GBP to XRP in the UK, then XRP to PHP—enabling instant, legally compliant transfers. He clarifies that Ripple’s stablecoin RLUSD complements rather than competes with XRP, with XRP serving as the bridge asset. The analysis shows that XRP’s limited adoption results from enduring regulatory frameworks rather than inefficiency, suggesting substantial upside if risk weights fall.
Neutral
XRP remains sidelined by current regulatory frameworks, providing no immediate price catalyst. While the discussion highlights XRP’s long-term institutional adoption potential once the BIS lowers risk weight, the news does not signal imminent changes. Traders are unlikely to react with significant buying or selling based solely on regulatory commentary. Historically, regulatory clarity debates have only driven price rallies after concrete policy shifts, not speculative discussion, so the expected market impact is neutral.