XRP was initially envisioned by Ripple as a reliable "financial infrastructure" to facilitate value transfer globally, especially in cross-border transactions that incur high costs and fees. With a 750% growth over the past three years, it is clear that Ripple is on the right track.

Today, the investment thesis in Ripple revolves around three critical missions to expand its financial value: (1) Building institutional-grade blockchain infrastructure on the XRP Ledger (XRPL), (2) Dominating international capital flow control areas, and (3) Developing Ripple USD stablecoin into the default payment medium.

1. Building a Blockchain That Organizations Truly Want to Use

The long-term success of Ripple depends on whether XRP can continue to address the issues faced by banks and large financial institutions - from regulatory compliance, asset control, to speed and cost of payments.

XRPL currently offers a powerful asset management toolkit: trust lines, issuance authorization, account freezing, transaction recall, and payment control. These are all important requirements that compliance teams have insisted on from the beginning, and they are features that are either lacking or fragmented across many other major blockchains.

This distinction makes XRPL an attractive choice for central banks and digital asset issuers. Additionally, XRPL is continuously improving to maintain its advantage: the Automated Market Maker (AMM) upgrade was launched in early 2024, and many new compliance tools are on the way.

As the XRPL becomes more friendly to institutions, large funds will find it easier to store assets and conduct transactions here, paving the way for the next step: dominating strategic areas on the global financial map.

2. Dominating Capital Flow Control Areas

The international payment system can only operate transparently when authorized by key regulatory bodies.

Ripple has made solid progress in key markets. In Singapore - the payment hub of Asia - Ripple's subsidiary has been granted a Major Payment Institution license by the Monetary Authority of Singapore (MAS), a prerequisite to participate in large payment flows in the region.

In Dubai, Ripple also achieved approval to provide cryptocurrency payment services at the Dubai International Financial Center (DIFC) in March, quickly partnering with several stakeholders in the UAE.

With a series of licenses and a presence in major financial centers, XRP is getting closer to its goal of becoming a global payment medium. And even if XRP is not the primary intermediary currency, XRPL can still succeed thanks to the next strategy.

3. Developing RLUSD Stablecoin as a Core Payment Medium

Financial institutions always need stable digital assets, instant payments, and predictability to reduce transaction costs and the time capital is 'tied up'.

RLUSD, the USD stablecoin issued by Ripple, is built on XRPL, fully backed by cash and equivalent assets, along with monthly audit reports from third parties. This is a crucial foundation for Ripple to develop its global payment network.

However, RLUSD still has a long way to go to become the "fuel" for this payment machine. As of mid-August, the circulating supply of RLUSD reached only about 642 million USD, while USDC - a rival stablecoin - has surpassed 67 billion USD.

To attract large institutions, Ripple needs to enhance listings on exchanges, integrate e-wallets, open payment corridors, and apply RLUSD in Ripple Payments services. Most importantly, the issuance volume of RLUSD must reach billions of USD to meet the demands of major players.

Conclusion

With three strategic pillars - institutional-grade infrastructure, presence in capital flow centers, and a strong stablecoin - Ripple is gradually laying the foundation for the future of global finance. If successful, XRP and RLUSD could become the 'pipeline' for cross-border value, changing the way currency flows in the digital age.