This Is Why XRP Cannot Be Backed by Gold, Ex-Ripple Official Explains
Ripple’s former director of developer relations, Matt Hamilton, has dispelled another popular misconception surrounding XRP. This time it was talk and speculation that XRP could be backed by gold. This kind of talk has emerged relatively recently amid speculation that XRP could be accepted by the world’s banks and other financial institutions for international settlements and would be backed by gold for its fair value.
No gold for XRP
Hamilton is adamant that such an outcome is impossible. The blockchain developer explains his view that XRP is a decentralized cryptocurrency with finite supply, which trades on the open market and has no issuer to hold collateral for gold. For this reason, Hamilton explains, XRP cannot be inflated to have a peg with another asset.
The only contact between gold and XRP is possible through its tokenization via XRP Ledger, with the creation of a token tracking the precious metal’s quotes, concluded the developer. For those who do not believe it and still think otherwise, Hamilton offered to exchange one ounce of gold for one XRP.
You can track gold by tokenising it on the XRP Ledger and creating a token such as XAU like companies have been doing for the past decade. But you can’t back XRP itself with gold.
— Matt Hamilton (@HammerToe) February 26, 2023
Previously, the former Ripple director, now a contributor to the Filecoin (FIL) ecosystem, also debunked rumors of a government buyout of the XRP offering. This theory was also extremely popular among the community and suggested that XRP would be bought back by the U.S. government at prices rumored to be as high as $10,000 per token.