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HomeCrypto NewsMarketFormer Ripple Director Responds to Rumors That XRP May Be Backed by Gold

Former Ripple Director Responds to Rumors That XRP May Be Backed by Gold

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It is unclear if this latest speculation relates to the controversial XRP buyback proposal.

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Rumors have made the rounds in the last few days that XRP may be backed by gold, with influencers predicting a price as high as $100 for the token in such a scenario. 

It is unclear where this particular speculation originates from. However, it could be an interpretation of the controversial XRP buyback proposal, which resurfaced again early this year.

Recall that Valhil Capital’s Jimmy Vallee came up with the XRP buyback theory in 2021 with the assumption that XRP would become the world’s reserve currency. According to Vallee, for this to happen, governments must own large quantities of the token, necessitating a buyback.

The Valhil Capital managing director drawing comparisons between his theory and the Bretton Woods Agreement asserted that this buyback would not occur on the secondary market but at a fixed rate as it was with gold. The lawyer placed this fixed value between $37,500 and $50,000 per XRP.

As reported, Ripple Chief Technology Officer David Schwartz expressed that the proposal looked like a scam.

Similarly, former Ripple Director Matt Hamilton debunked the latest rumors that XRP Will be backed by gold, stating, “you can’t back XRP itself with gold.” According to Hamilton, what is possible is to track gold by creating an XAU token on the XRP Ledger. 

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A view supported by the former Ripple director explained that to back 1 XRP with 1 ounce of gold, you would need 2.8 million tons of gold for the 100 billion XRP token supply. Hamilton pointed out the impracticality of this as humans have only managed to mine about 208,874 tons of gold in our history. Hamilton asserted that an even more significant concern is that XRP has a finite supply while gold inflates by about 0.3% annually. 

It is worth noting that the XRP community is no stranger to conspiracy theories and speculation. Schwartz, in the past, has had to debunk narratives that XRP traded as high as $327k on a private ledger.

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Okoya David
Okoya David
Okoya David Kio is a crypto enthusiast passionate about understanding what makes the nascent market tick. When he's not pondering about cryptocurrencies, you might find him in a BP debate room trying to proffer solutions to age-old societal problems.

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