- Ripple aims to raise $1 billion through a SPAC to expand its XRP-focused digital treasury.
- The plan includes purchasing about 427 million XRP to strengthen corporate crypto holdings.
Ripple Labs is gearing up to make a significant move to consolidate its role in the digital asset arena by increasing its treasury by a significant margin. The blockchain payments company intends to raise $1 billion with the aim of buying XRP tokens to create a special digital asset treasury.
This strategic move follows as corporate cryptocurrency reserves keep picking up steam throughout the industry, albeit much slower than the adoption of Bitcoin and Ethereum. The fundraising will take the form of a special purpose acquisition company, and the specifics are yet to be finalized before any formal announcement.
Strategic Treasury Building Through SPAC Fundraising
The treasury Ripple plans will add newly acquired XRP to existing XRP holdings from the existing reserves of the company. The blockchain company has a sizable XRP position, estimated to hold about 4.5 billion tokens, out of a circulating supply of roughly 59 billion tokens.
The Company also holds about 37 billion tokens in on-ledger escrow accounts, which release tokens in a controlled monthly distribution. The company is proposing a $1 billion investment that could add approximately 427 million XRP tokens, based on the current valuations.
This treasury strategy corresponds with Ripple’s announcement earlier this week regarding its $1 billion purchase of GTreasury, a corporate treasury management service focused on digital assets.
The infrastructure will facilitate the management of cryptocurrencies, stablecoins, and tokenized deposits while simultaneously enabling institutional clients and corporate treasuries to generate yields. The timing indicates that Ripple is seeking to establish itself as the leading holder of XRP among corporations globally.
As of now, XRP treasury adoption is still small compared to the top cryptocurrencies, such as Bitcoin, which has over $152 billion in corporate treasuries, followed by Ethereum with $23 billion in corporate treasuries, which indicates how little XRP has been accumulated by institutions.
Although several companies have publicized their XRP treasury intentions, such as Trident Digital Tech Holdings aimed at $500 million, Webus at $300 million, VivoPower at $100 million, it is clearly Ripple’s stance taken last week, with the necessary first steps taken to secure a billion dollars of XRP, which vastly overshadows these meagre intentions. The fundraising structure, terms and plans still require discussions between the parties and may likely be modified before being finalized.
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