Brad Garlinghouse, the CEO of Ripple, has recently revealed that a great deal of the company’s profit is actually gotten from the sale of its cryptocurrency, XRP.
In a Financial Times report published Friday, Garlinghouse made mention of the importance of XRP to the San Francisco-based company which he had also recently hinted would in line for an IPO in the coming years.
Regarding XRP sales, Garlinghouse said that Ripple “would not be profitable or cash flow positive [without selling XRP].”
Garlinghouse further added that there are also multiple revenue sources beyond XRP alluding that taking away the company’s software revenues would make them less profitable in the same way it would if their XRP reserves were taken away.
The fact that Ripple holds a significant portion of XRP’s total supply and can unlock tokens at will, remains one of the most controversial features of the token which has even come under legal actions by investors who argue that it is a ‘security.’
Meanwhile, in another section of the report, Garlinghouse disclosed that the Ripple gives incentives to its clients based on the size, type, shape, and level of priority they have.
That statement particularly catches the eye since one of Ripple’s clients, MoneyGram, U.S.-based money transfer company, announced last week that it had received about $11.3 million from Ripple, which was reportedly paid in XRP, during the last six months of 2019.
In a statement, the firm stated,
The Company is compensated by Ripple in XRP for developing and bringing liquidity to foreign exchange markets, facilitated by the ODL [Ripple’s On-Demand Liquidity] platform, and providing a reliable level of foreign exchange trading activity. We refer to this compensation as market development fees.
MoneyGram reportedly has high hopes that the partnership with Ripple will go a long way to reduce the needs of working capital as well as increase the company’s earnings and cash flow.