Wellgistics secures $50M to develop XRP-based healthcare payment system

Wellgistics Health, a pharmaceutical distribution company in the US, has announced that it will start accepting XRP for payments. In a press release, the healthcare infrastructure company said it has secured a $50 million equity line of credit that will be spent on implementing the plan.

According to the company, proceeds of these funds, secured through LDA Capital, will go towards developing the on-demand financial infrastructure that will allow the national healthcare network to transition to using blockchain for payments.

The company CEO, Brian Norton, stated that the platform will connect manufacturers with pharmacies and patients, doing away with the bureaucratic red tape in the healthcare sector.

Norton said:

“Our blockchain-enabled payment system and ledger is just the next logical step in healthcare evolution, allowing us to hardwire speed, liquidity, and transparency into a system that’s long been starved of all three.”

Meanwhile, the company stated in its press release that it chose to integrate XRP and its infrastructure because of its benefits, which include speed, transparency, global scope, and low cost. It added that there is also flexibility with XRP-backed lines of credit to boost liquidity for independent pharmacies.

Although the company provided no information on when the XRP services would start, it stated the potential use cases for XRP and Ripple technology. These include real-time settlements, rebates, credit lines, and global vendor payouts.

Wellgistics Health is a publicly listed company with a network of over 6,000 independent pharmacies in the US, trading on the Nasdaq under the ticker WGRX.

Wellgistics Health to make XRP a treasury reserve asset

Interestingly, Wellgistics Health stated in its announcement that it will also make XRP its treasury reserve asset. While it did not explain how it intends to achieve this, the move is quite surprising.

It marks the first time a publicly listed company will consider adopting XRP as a treasury asset. However, it only continues the trend of low-cap companies looking to cryptocurrencies as reserve assets, with Bitcoin being the preferred option.

Wellgistics had reasons to choose XRP for both payments and treasury. It pointed at the launch of the XRP futures contract by the Chicago Mercantile Exchange (CME) Group, Mastercard highlighting the token as a bridge currency in cross-border transactions, and other developments as proof of XRP’s future potential.

However, adopting XRP has not impacted the company’s stock performance. WGRX was down 30.56% at the close of the market on May 8 and traded at $3. It has already seen a further drop to $2.872 in premarket trading, forcing its market cap to drop to $155.83 million.

XRP gains almost 10% in a massive day for altcoins

Meanwhile, XRP is up more than 8% in the last 24 hours as the token returned to a positive year-to-date performance after recent struggles. The token’s latest gains come amidst the general market pump that has seen Ether gain more than 20% in value, its biggest daily gain since 2021.

While several factors are responsible for the broad gains, XRP gains are also attributed to the recent announcement by the Securities and Exchange Commission (SEC) that it has settled its lawsuit with Ripple.

Under the settlement agreement, Ripple will pay $50 million to the SEC, less than the original $125 million that the court had ordered it to pay, and will get back the remaining $75 million; the SEC approval marks the end of the long-running legal battle over the status of XRP.

The settlement is still subject to the approval of the presiding judge, Analisa Torres, but criticism has already been attracted from SEC Commissioner Caroline Crenshaw. Crenshaw criticized the deal in a statement, noting that it will affect the SEC’s ability to regulate crypto firms. Despite the criticisms, many expect the settlement to be finalized in the coming weeks.

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