VivoPower International’s Strategic Shift to XRP
VivoPower International has recently made headlines with its decision to pivot its treasury strategy toward XRP, a move that has intrigued the market. Announced nearly a month ago, this decision has sparked curiosity about the rationale behind choosing XRP over other cryptocurrencies like Bitcoin and Ether. In a detailed conversation with Tony Edward from Thinking Crypto, VivoPower’s Executive Chairman and CEO Kevin Chin, along with Board-of-Advisors Chair Adam Traidman, provided an in-depth look into their innovative approach.
Understanding VivoPower’s Preference for XRP
Kevin Chin shared that his journey with cryptocurrency began with purchasing XRP in 2016. He highlighted its initial utility in facilitating low-cost transfers to emerging markets, aligning with the regions where he conducts both profit-driven and philanthropic activities. He elaborated, “When the opportunity arose to reorient VivoPower into an XRP-centric treasury and DeFi solutions provider, it was a decision I felt strongly about, and the board shared this conviction.”
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Filling a Market Void
Adam Traidman pointed out a significant market gap that VivoPower aims to fill. While many companies have embraced Bitcoin for their balance sheets following MicroStrategy’s success, VivoPower is pioneering the use of XRP, which boasts substantial global liquidity and a dedicated following. Unlike the stagnant nature of Bitcoin, VivoPower envisions XRP as a dynamic asset that can be leveraged for utility and growth.
Implementation Strategy
VivoPower plans to utilize BitGo for custody and OTC conversions, stake its XRP holdings on the Flare Network for yield generation, and leverage Ripple’s RLUSD stablecoin for seamless cross-border transactions. Kevin Chin mentioned, “In the coming weeks, we will begin trialing this strategy with our businesses based in the Philippines, addressing the inefficiencies we’ve experienced with SWIFT in regions like Southeast Asia and Africa.”
VivoPower’s Vision for the Next Five Years
VivoPower’s corporate structure allows it to distribute yields from its XRP holdings directly to investors, a unique proposition outlined by Adam Traidman. This structure positions VivoPower distinctively, offering investors the potential benefits of XRP along with yield generation.
Capital Strategy and Investment Plans
The company intends to fund its initial XRP acquisitions through equity, with significant backing from Prince Abdulaziz of Saudi Arabia, a long-time XRP investor. Future borrowing will be considered only if it aligns with favorable cost-of-capital metrics, as advised by ex-Goldman CFO David Mansfield.
Navigating Crypto Volatility
Addressing concerns about cryptocurrency market volatility, Kevin Chin emphasized the strategic advantage of long-term planning. He stated, “Our approach is to view market fluctuations as opportunities for yield generation, with a strategic outlook spanning five-year cycles.” Adam Traidman underscored the robust macroeconomic environment, citing the emergence of spot-crypto ETFs and supportive regulatory developments in the U.S. as factors that bolster the stability of leading cryptocurrencies.
Future Prospects and Expansion
While specific details remain under wraps due to nondisclosure agreements, Kevin Chin revealed that VivoPower is conducting due diligence on startups utilizing the XRP Ledger, aiming to invest in ventures that promise both returns and expanded use-cases for their treasury. The company plans to pilot RLUSD-based remittances within its subsidiaries, exploring opportunities in markets like Ghana and Kenya, where dollar liquidity is limited.
In summary, VivoPower is committed to its long-term vision, with Kevin Chin confidently stating, “We will be here in five years, in ten years, regardless of market conditions, by engaging and building DeFi solutions that generate income and cash flow.”
As of the latest update, XRP was trading at $2.08.
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