What it means for XRP investors and prices

Ripple Labs released a major update on Feb. about its XRP Ledger (XRPL). But will that be enough to save the XRP price from Bitcoin’s strong correction?

XRP is one of the most popular cryptocurrencies in the world. Its market is neck-and-neck with BNB to rank number four by this metric.

Its main use case is fast, low-cost cross-border payments, but XRP Ledger opens up a new use case for XRP-decentralized finance (DeFi) tokens.

I A February update from the official team at Ripple Labs shows a big change in the richness of the ecosystem. But very quickly, before getting into the review—

Here’s how the XRP price reacted after Ripple released an update on these exciting new developments: Friday, Feb. 13, XRP traded at an average daily price of $1.35 before rising above $1.65 on Sunday.

“Institutional DeFi on XRPL”

A Ripple Labs update teased “Institutional DeFi on XRPL,” in a headline that promised the network would scale the world’s real money with XRP at its core. The main selling point for Ripple investors and developers in this announcement is that these updates make the XRP Ledger well suited for institutional level players.

Important financial firms with large clients in New York City and London can rely on this technology to better meet their business needs. Or at least, that’s what the XRP team says. Note opened with a quick TLDR; an overview highlighting the use of XRP in the liquidity and credit and payments markets.

This refers to On-Demand Liquidity (ODL) powered by Ripple. This feature of the platform allows large institutions or individuals moving large sums of money to send them through RippleNet using XRP tokens.

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But the exciting updates include:

• MPT (Multi-Purpose tokens not visible in RWA token)
• Allowed Domains for access management
• A lending protocol for the XRP ledger credit markets
• Confidential Transfers for institutional-level privacy
• Ripple support for foreign exchange (FX) markets.

Meanwhile, new advanced tools like Credentials, Token Escrow, and Batch Transactions will help business clients stay compliant with financial regulators and automate on-chain workflows.

“The foundation for the next generation of blockchain-based financial infrastructure is being built, with XRP as the backbone,” Ripple Labs said.

Fine-Tuning XRP Utility to Purpose

In addition to the institutionalized feature, which forms the backbone of the next-generation XRP ledger ecosystem, Ripple also announced that XRPL is now equipped with new developer tools to keep open development popular.

Livenet Explorer is a developer tool that allows blockchain institutions and developers to visualize real-time on-chain activity, balances, and token flows. Meanwhile, XRPL Devnet Tools will help blockchain developers test features such as MPTs, escrow contracts, bulk transactions, and lending agreements before deploying Dapps to the mainnet.

On the payments side and on the FX side, permissioned domains will help create walled areas on an open blockchain with controlled information. In addition, this can support KYC and AML tools for regulatory compliance.

XRPL prepares to open balance sheets through securitization and liquidity. This will happen by issuing conditional payment tokens programmed right into XRP smart contracts.

One of Ripple’s big points in the February update is MPTs, or Multi-Purpose Tokens. Ripple says MPTs are the future of tokenization on XRPL. They can support complex financial instruments such as bonds and currencies while managing metadata and parameters without requiring custom contracts.

What It Means For XRP Prices

For institutional and private blockchain developers, here is a big development. They may attract more participants and large financial firms to the XRP ecosystem.

But what does it mean for cryptocurrency investors?

During the week following the update announcement, the price of XRP outperformed the other top 10 cryptocurrencies by market average, indicating that the market saw the news well.

However, as CryptoPotato reported, the current state of the industry is very negative in terms of price action. In fact, the popular Fear and Greed Index touched the Extreme Fear zone by 5 points in the past few days – the lowest in eight years. At times like these, good news doesn’t move markets like it does in bull markets.

While the update is undoubtedly sound and important, it is unlikely to result in any significant price change, at least in the short term.