XRP’s Gold Link: A Synthetic Bridge to Global Finance?

Analyst Versan Aljarrah proposes a novel approach to linking XRP to gold without direct backing. Instead of XRP holding gold reserves, it would facilitate the transfer of gold-backed stablecoins on the XRP Ledger (XRPL). Each token on the XRPL would represent one gram of physical gold, held by custodians like MKS Pamp and Imperial Vaults. XRP's role would be to provide liquidity and settle trades on the XRPL's built-in exchange, creating a “synthetic connection” to gold and other tokenized assets. Meld Gold is the frontrunner in developing such a gold token on the XRPL, aiming to back each token with one gram of physical gold. However, significant hurdles remain. Issuing gold tokens requires rigorous auditing, legal frameworks, and insured vaults. XRP's fixed supply and decentralized nature present technical challenges to traditional asset backing. Former Ripple developer Matt Hamilton emphasizes that XRP cannot be backed by gold in the traditional sense; its price is driven by adoption, legal clarity, and market sentiment. While Aljarrah claims major institutions like JPMorgan and BlackRock have private plans to utilize XRP as a bridge, this lacks public confirmation. The ongoing Ripple-SEC lawsuit is a major factor influencing institutional involvement. Even with increased trading volume from gold-pegged tokens, XRP's price wouldn't directly mirror the gold spot price. Instead, it would benefit from increased liquidity and potentially higher trading volume, boosting its value as a cross-border payment tool. In essence, this strategy positions XRP not as a gold-backed asset but as a crucial facilitator within the gold-tokenized ecosystem on the XRPL.

(Source: https://www.newsbtc.com/altcoin/no-gold-no-problem-why-xrp-stands-strong-on-its-own-analyst/)