Ripple CEO Brad Garlinghouse has told World Economic Forum (WEF) delegates in Davos, Switzerland that an initial public offering (IPO) may be on the cards for Ripple soon.
IPOs are events where stocks in a company are generated and sold publicly for the very first time. Recent high-profile IPOs have included Beyond Meat, Uber, and Lyft.
According to Asheesh Birla, SVP of Ripple, Garlinghouse shared with the audience:
“In the next 12 months, you’ll see IPOs in the crypto/blockchain space. We’re not going to be the first… but I expect us to be on the leading side. It’s a natural evolution for our company.”
The initial coin offering (ICO) craze was, to some extent, originally supposed to replace the IPO model in favour of issuing tokens.
However, many token issuers fell afoul of securities laws, especially in the USA, and have looked towards more compliant offerings.
Garlinghouse also said that the crypto community should expect more blockchain companies to launch IPOs in the coming years.
Details of when Ripple may potentially go public and its predicted opening valuation were not discussed.
How would an IPO affect XRP price?
Sales of XRP have been falling recently, with the final quarter of 2019 seeing just $13.08 million worth of the token sold.
Ripple’s XRP Markets Report compared this to some $66.24 million sold in the previous quarter. However, Ripple claimed this was due in part to a planned reduction in XRP sales and paused programmatic sales.
Many XRP sales are now over-the-counter (OTC) trades to institutional partners and commercial users of the Ripple platform and remittance solutions.
It’s hard to predict how an IPO sale would influence the price of XRP directly. However, it could reduce demand as investors look to buy stock rather than tokens.
Garlinghouse has been quick to remind XRP investors that Ripple cannot control the price of XRP directly.
An IPO could also bring renewed interest to the blockchain technology company from retail investors who may have been waiting on the sidelines given the volatile nature of cryptocurrencies.
Ripple’s cross-border payment solutions have been steadily growing over the past year, and the firm is now working with multiple financial organisations and institutions to deploy its x-Rapid technology worldwide.
In November 2019, Coin Rivet reported that Tokyo-based SBI Remit would be using RippleNet to facilitate cross-border payments between Japan and Vietnam, and similar trials have been deployed in Latin America.
You can read more about Ripple’s technology solutions here.