Blockchain start-up Ripple, whose digital currency has seen huge volatility this year, is investing in a blockchain-focused fund to encourage the next great technology app built using its software.
Ripple, which owns about 60 billion of the 100 billion XRP. It would invest $25 million of that digital currency.
The company’s aim is to bankroll “clever” entrepreneurs. Especially, the one who can find additional uses for Ripple’s blockchain technology.
“We want smart people and smart entrepreneurs, who can solve a problem using XRP,” Cory Johnson, chief market strategist at Ripple, told CNBC in an interview Wednesday..”
As of now, ripple’s technology is mostly applied to real-time transaction settlements for banks. The company has announced partnerships with U.S. money transfer giants MoneyGram and Western Union as well as American Express and Santander.
Johnson compared the potential for Ripple’s technology to iPhone software. It ended up facilitating some of the most valuable private startups in the world.
“When I got my iPhone I did not think the killer app would be Uber, the most valuable private company in the world, or a competitor to Kodak with Instagram,” Johnson said. “I don’t know what the best use of XRP is going to be, and I hope it’s something we can’t even think of.”
So, ripple’s market cap based on the digital currency’s price alone is close to $29.4 billion.
“A lot of people are going to develop things using XRP . Because it sits on our balance sheet, it will be helpful to us from a valuation standpoint,” Johnson said. “If somebody starts the next Uber, or Instagram or Salesforce using XRP, that would be great for us.”
Also, This is the first fund XRP has contributed to but it won’t be the last, Johnson said.
But Johnson said the company is not looking to offload its cryptocurrency.
$25 million is tiny when compared to the rest of Ripple’s balance sheet.