The whales’ return coincided with optimism that the notorious Ripple vs. SEC lawsuit may finally be over this year. 

At the same time, discussions around the controversial Ripple buyback theory renewed after influential Ripple Labs contributor and securities attorney Jimmy Vallee reminded everyone that XRP buyback might be possible if Ripple’s legal battle with the SEC ends in favor of the company.

The Ripple buyback theory, introduced by Jimmy Vallee back in 2021, relies on a thesis that XRP may become the world’s next reserve currency. According to it, the current financial system, especially in the US, whose dollar is the world’s reserve currency, is facing trillions of dollars of debts, which are not sustainable. 

The world’s economies may be destined to move towards a new financial system to solve the debt problem. The new financial system should have a liquid and scalable digital asset to support the global wealth’s total value. 

According to the theory, the bridge currency XRP could be an asset. But to make it come true, the government must first hold large numbers of XRP to guarantee liquidity. 

Theoretically, this could be achieved by purchasing the supply of the XRPs from the secondary market. The precedent was set in the Great Depression when the US government purchased gold from the citizens to fill the empty federal reserve. 

To keep the market stable, XRPs should come at a fixed price. This means that if XRP covers all the world’s wealth, its market cap should accordingly reach quadrillions of dollars. According to the Ripple buyback theory, the price of XRP, with a finite 100 billion supply, could linger between $37K and $50K.

The theory raised a lot of discussion across the XRP community. The critics claim that it is unachievable, especially when XRP comes with the centralized Ripple Labs company, and governments are experimenting with their CBDCs. Countries like China are working towards making their fiat the world’s reserve currency. 

In addition, legal limitations are strengthening around the globe, preventing institutions from buying and holding large or any amounts of digital currencies.

Ripple Labs and XRP must go a long way to become the global reserve currency. Even to establish the XRP as the main bridge currency for international value transfers, the company must first overcome its major legal hurdle with SEC.

While the XRP community is looking for the Ripple vs. SEC lawsuit to end this year, the XRP whales are making their moves. As whale activity is often an indicator of something larger brewing, it is worth keeping a close eye on their movements. Even if the significant XRP price moves have yet to materialize.