Crypto strategist Cedric Beau has weighed in on one of the XRP community’s most debated talking points: whether banks need to hold XRP to use Ripple’s On-Demand Liquidity (ODL). In a recent X post, Beau cautioned that the idea banks will “use XRP without holding it” should not be celebrated as a feature but recognized as a red flag. His comments reignite a discussion about the difference between technical design and institutional adoption. ODL’s Model Versus Bank Balance Sheets Supporters of Ripple’s ODL, including the account $589, argue that misconceptions about balance sheets fuel unnecessary fear, uncertainty, and doubt (FUD). In practice, ODL is designed so that banks and payment providers never have to warehouse XRP as a long-term asset. Instead, a bank funds fiat on one end of a transaction, market makers supply XRP liquidity, and the token is bought, transferred across the XRP Ledger in three to five seconds , and sold into destination fiat. All of this happens automatically through APIs, meaning no balance-sheet exposure for the bank. "Banks don't want to hold $XRP , but they'll use it anyway." That, precisely, is a red flag, not a feature Real flows need real trust Not just theory from a sales deck.. but balance-sheet-level buy-in, real corridors, and global compliance alignment And no, you don’t get… https://t.co/CBXUeinXZu — Cedric Beau (老李) (@Web3BeauCedric) September 4, 2025 Ripple has long emphasized this as a core advantage: ODL removes the need for pre-funded nostro accounts, freeing up capital and enabling faster, cheaper international settlement. Cedric Beau’s Counterpoint Beau, however, argues that dismissing banks’ reluctance to hold XRP misses the bigger picture. In his words, “Banks don’t want to hold $XRP, but they’ll use it anyway. That, precisely, is a red flag, not a feature.” He insists that real adoption requires “balance-sheet-level buy-in, real corridors, and global compliance alignment.” From Beau’s perspective, relying on a model where financial institutions deliberately avoid direct exposure to the underlying asset raises questions of trust. Having worked with executives building global payment rails, Beau claims the industry consensus remains that XRP “adds friction, not utility.” His critique challenges the notion that technology alone can drive adoption without institutional trust and regulatory clarity. We are on X, follow us to connect with us :- @TimesTabloid1 — TimesTabloid (@TimesTabloid1) June 15, 2025 Pilots, Partnerships, and Limits Ripple has demonstrated that ODL works in practice through pilots and partnerships across corridors in Asia, Europe, and Africa. Remittance firms and payment providers have successfully settled cross-border flows using XRP as a bridge currency , showcasing the speed and efficiency the system can deliver. Yet as Beau highlights, limited pilots are not equivalent to global-scale adoption by tier-one banks. The gap between proof-of-concept and balance-sheet integration remains significant. The Bigger Question: Trust and Regulation At the heart of the debate is whether ODL can achieve mainstream traction without banks directly holding XRP. Regulatory frameworks, accounting standards, and custodial infrastructure still present hurdles for large financial institutions. Until those are resolved, Beau argues, stablecoins or other digital assets may be favored because they fit more neatly into existing compliance models. Looking Ahead Cedric Beau’s remarks underline a central tension for Ripple: ODL’s technical design reduces balance-sheet friction, but true global adoption demands institutional trust and regulatory clarity. For the XRP community, the challenge is not proving the technology works—it already does—but convincing the world’s biggest financial players that it belongs at the core of their operations. Disclaimer : This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses. Follow us on Twitter , Facebook , Telegram , and Google News The post XRP and Banking Trust: Pundit Warns of Red Flags in Ripple’s ODL Model appeared first on Times Tabloid .
