Could SBI shareholder deal help XRP bounce back?

In a deal that will no doubt have XRP fans celebrating, SBI Holdings, a division of Japanese financial behemoth SBI Group, announced today that will offer its shareholders dividends in the form of Ripple’s XRP.

MorningStar Japan—a joint venture with SBI Holdings offered via public trade—will issue 30 XRP tokens to each shareholder possessing more than 100 shares in the company, according to a press release issued by the company Wednesday morning. The program is set to begin on September 30 of this year.

And while the arrangement with SBI will probably benefit XRP and its holders, the effects are unlikely to be significant—and any positive gains might not be seen right away.

SBI shareholders interested in taking part in this arrangement will be required to open a VC trade account through SBI Holdings, and they have until March 31, 2020 to do so. It’s also worth noting that Ripple has been working closely with SBI for some time. Ripple and SBI previously collaborated through MoneyTap—a blockchain-based payments application system—in 2018 and formed a new venture known as SBI Ripple Asia, which provides people in Japan and abroad with the chance to trade, buy and sell XRP tokens.

But is any such deal enough to counteract the apparent downward pressure on XRP’s price as of late, including the effects on XRP resulting from Ripple’s own sale of its reserves?

At the moment, XRP—along with the rest of the crypto market—has experienced a severe price drop over the past 24 hours, falling roughly 5 percent from its previous trading position. Since news of the SBI deal broke this morning, however, the XRP’s price has seen a slight bump, now trading at nearly $0.26 per coin.

Nevertheless, the SBI arrangement is unlikely to be enough to permanently right the XRP ship. Though XRP remains a popular cryptocurrency, it doesn’t have the power, presence, or market cap of Bitcoin. Most exchanges, in fact, are not specifically designed for XRP trading.

What’s more, these dividends will only be paid out to stockholders of SBI, which is still relatively small when compared with individuals who hold Bitcoin and shares in competing stocks. 

This move will almost certainly prove beneficial to XRP in the long run, but we’ll likely only see action once the first initial dividends are paid out and trading continues through SBI Ripple Asia for an extended period.

Still, SBI has serious confidence in the asset and claims that XRP—which is currently trading for about 25 cents—will be “one of the most important asset classes in asset management.”