Benefits of High XRP Price for Holders and Banks
March 15, 2026
A high price for XRP might be music to the ears of holders but it is, in fact, crucial for banks in the grand scheme of things. About 8 years ago, Ripple’s CTO, David Schwartz, pointed out that banks would require XRP to have a high value. This argument stemmed from the fact that every transaction made using the RLUSD stablecoin on the XRP Ledger necessitates XRP as a gas fee, positioning XRP at the core of Ripple’s ambitious $33 trillion stablecoin objective.
Despite Ripple’s self-valuation at $50 billion, XRP is currently trading at $1.39, representing a 63% decline from its peak. While most XRP holders keenly watch the price movement in hopes of a recovery, a critical question prevails – can XRP effectively function if its price remains low? According to Ripple’s CTO, the answer is a resounding no.
In a viral post on Kora, David Schwartz laid out a simple yet powerful argument highlighting that the price of XRP necessary for making a million-dollar payment would always equate to at least $1 million. Higher XRP prices correlate with increased liquidity, consequently leading to more cost-effective payments. The rationale is straightforward – if a bank intends to transfer a large sum, such as a billion dollars, and XRP is valued at a mere five cents, purchasing the necessary XRP could significantly impact the price mid-transaction, creating slippage and rendering the process impracticable. Therefore, a high XRP price is imperative to avoid such disruptions in transactions, thereby making it a requisite for banks.
Ripple’s recent strategic maneuvers align with Schwartz’s argument, as the team endeavors to proliferate RLUSD, its stablecoin, on the XRP Ledger, targeting the vast $33 trillion stablecoin market. Each RLUSD transaction on XRPL mandates the usage of XRP as a gas fee, effectively circumventing slippage concerns for banks while ensuring that XRP remains at the heart of every transaction. The roadmap, as outlined by Schwartz years ago, begins with smaller currency corridors and gradually progresses to major currencies involving trillions in daily movements.
The landscape has evolved since Schwartz initially made his case, with tangible infrastructure now being put in place. Ripple secured conditional endorsement for a national trust bank charter from the OCC in December 2025 and found a spot in Mastercard’s global Crypto Partner Program alongside industry giants like Binance, PayPal, Circle, and Gemini. Moreover, Ripple initiated a $750 million share repurchase in March, catapulting its valuation to $50 billion, a 25% hike from its November funding round, despite the token’s low trading figures. Such strategic moves and market indicators signify a bullish trajectory for XRP and Ripple, underscoring the viability of Schwartz’s logical argument in the real world.
