Ripple’s $XRP recent application for a banking license in the U.S. may appear procedural on the surface. However, it could signal a deeper transition that redefines how financial institutions operate at scale.

While crypto markets continue to price in short-term movements, some analysts believe this development will accelerate XRP’s transition from speculation to utility.

Xaif (@Xaif_Crypto), a crypto analyst and enthusiast, shared a detailed explanation of why the banking license represents more than just regulatory compliance. In his view, it’s the start of a new phase where Ripple’s technology is no longer just an alternative but the preferred standard.

He pointed out that if approved, Ripple would be able to hold stablecoins as reserves with the U.S. Treasury. This move effectively brings Ripple and RLUSD into direct alignment with the U.S. government on digital asset infrastructure.

Why Utility Shifts the Value Proposition

Ripple is currently pursuing a master account with the Federal Reserve through Standard Custody, and the ability to hold RLUSD with the Fed would put Ripple on the same level as major banks like JP Morgan, potentially unlocking massive gains for XRP holders.

Xaif also noted that approval would result in increased liquidity, which in turn leads to increased performance for XRP, ultimately creating more demand and potentially driving the asset’s price higher. While he acknowledged possible mid-term price levels around $10 to $12, he emphasized that the real opportunity lies in the utility phase ushered in by Ripple becoming a bank.

This utility, he argued, is unlocked by Ripple’s ability to settle massive financial transactions without relying on SWIFT. Ripple’s infrastructure operates within ISO 20022 standards, allowing banks and financial entities to use XRP to move funds globally with low cost and near-instant settlement.

Xaif explained that while a $1 million transaction might cost $1,000 through legacy systems, it could cost less than $10 with XRP.

Competitive Advantage Without the Legacy Constraints

Ripple’s ability to process large-scale settlements faster and cheaper offers a real competitive edge. Xaif emphasized that if Ripple maintains profit margins while cutting costs, its model becomes highly attractive to institutions. By removing intermediaries and replacing outdated systems like SWIFT, Ripple becomes both platform and processor, offering an all-in-one solution.

This positions XRP $XRP for a much larger role in global finance. Xaif called this a turning point, noting that if Ripple’s banking license is approved and integration with government systems succeeds, it could trigger a major shift in how cross-border payments are handled worldwide.

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