Maybe this is way oversimplified, but I’m trying to conceptually understand this in its most basic form.
Forex market trading is the first quoted currency being bought or sold against the other one.
Example USD / JPY
Digital equivalent: RLUSD / GYEN
Forex market cap is valued at 795 billion. Probably more
There are currently: ~ 800,000+ RLUSD total supply across XRPL and ETH network
~ 2,098,780,833 GYEN, which you can buy on Coinbase = 14,377,698 USD
The added liquidity on the XRPL will raise the price of XRP because as more country stable coins are issued across networks, the correspondent value of the XRP, the bridge asset, has to absorb the additional liquidity represented by both countries stable coins. An actual cap on XRP supply is important in this equation.
As more RLUSD are minted, this shifts that supply line to the right, meaning greater quantity and lower price. This goes for any stable coin, and directly shows why our purchasing power goes down holding fiat.
Since XRP supply will only shrink as more Stable coin liquidity is used to purchase XRP, the XRP supply curve shifts further the left, leading to higher prices.
submitted by /u/urmummyisdummy
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