A look over the news coming out of Ripple, the company in charge of the XRP token that is hailed to be a banking-friendly cross-border payments solution, paints a picture of progressive mainstream adoption. There have been recent big partnerships with both Santander and Money gram to get excited about.

However, a recent 8-K SEC filing from MoneyGram has shown that the working relationship between Ripple and the remittance giant MoneyGram is worth delving a little deeper into. MoneyGram also recently said that is moving 10 percent of its total transaction volume between the United States and Mexico using Ripple’s ODL.

But, It also appears as if Ripple has been injecting XRP into MoneyGram’s business since June of last year to the tune of $11.3 million in the last two quarters of 2019 alone. What makes it even more concerning is that until MoneyGram ran this past the SEC, they had been happy to class it as revenue. Due to the SEC guidance, however, it has now had to restate fourth-quarter guidance to account for Ripple payments as “contra expenses”.

A power play with XRP

The concerning aspect of this unearthed business practice between the two firms is just how much power Ripple is gaining from XRP. The company has tried to distance itself from the movement of the cryptocurrency market around the XRP token, especially when allegations were made that Ripple was dumping the coin for profit.

Now, seeing as Ripple is using XRP as a way to compensate MoneyGram, the question arises as to how much reliance there is on the Ripple Business from the selling of its tokens. This article from the Financial Times has revealed that perhaps Ripple would not be in such a powerful place if it was not using its XRP token to float its business.

In fact, an interesting quote from the CEO of Ripple, Brad Garlinghouse, has also been unearthed by the Financial Times, where he states: “We would not be profitable or cash flow positive [without selling XRP], I think I’ve said that. We have now.”

XRP dumps?

Through last year, there was much controversy as Ripple continued to dump large sums of XRP onto the market with allegations coming forward that the reason for this was in order to manipulate the market from Ripple. It even led to threats of a hard fork.

Earlier this year, the company finally bent to the will of their community and said they would halt its monthly sales of escrow released tokens. However, the reasoning for these dumps, although always claimed to be for the advantage of the ecosystem, may now be questioned further as a tool to keep Ripple profitable as it appears as if Ripple would not be profitable without selling XRP tokens.

