Donald Trump’s first few weeks in office (less than a month at this writing) have already been a whirlwind of activity on a number of fronts.
One of the big areas that Trump has been moving in has to do with cryptocurrencies, and that is driving interesting things which are happening on the Ripple front.
We’ll be talking about some of those “interesting things” today and what they mean for you.
If you’re not already familiar with them, the first question is…
What is Ripple?
Ripple is a company focusing on technologies facilitating transactions. Sure, that sounds very TradFi at first – but don’t confuse XRP with MasterCard or VISA, for example.
Ripple focuses on high speed transaction networks, the sorts banks use to transfer funds between themselves, both within national borders and around the world. Think of the international SWIFT network or the federal government’s own FedNow service for examples. Ripple uses an already-mined token, XRP.
Also, because XRP has already been mined, more won’t be created.
So, what Ripple is doing with XRP is already exciting for those who seek a certain amount of stability in their assets. Since the XRP token is fully mined, there’s no anticipated dilution of supply. That’s unusual in cryptocurrencies!
Even the most established OG cryptocurrency, the legendary bitcoin, is subject to dilution. Eventually, the maximum number of bitcoin, 21 million, will be mined – but that hasn’t happened yet. Meanwhile, every new bitcoin increases the global supply, diluting the value of every other bitcoin in existence.
Blockchain-backbone token ether has a more complex supply situation. There’s no maximum limit on ETH in circulation. Ether tokens are rewarded and destroyed on a daily basis. We know what the supply is today, but tomorrow? Five years from now?
Dilution is a fact of life in virtually every financial asset! Companies can issue new shares at any time, for any reason. Those same companies borrow money constantly, too. Global governments borrow money from investors daily at a shocking rate – billions of dollars a day in the U.S. alone. Every new debt, every new liability creates a new financial asset, diluting the existing supply.
Currencies, too, suffer daily dilution (which we call “inflation” when it happens in dollars, or “devaluation” when it’s euros or yen or yuan). The economically ignorant rejoice in this new money, though the wise understand there’s no new value created.
Even gold itself, perhaps the most ancient surviving form of money, gets diluted by 1-1.5% annually thanks to newly mined gold. (For more on this subject, Lyn Alden has an excellent discussion of bearer assets).
All this is just to say that dilution is simply a fact of life in the world of financial assets. With almost zero exceptions.
When it comes to things “they aren’t making more of,” Ripple stands right up there with land as an asset with a known, fixed supply. (And engineers are working hard to solve the real estate supply problem.)
So Ripple’s fixed quantity is appealing as a store-of-value asset. What’s the case for Ripple as a growth asset?
The Ripple use case: An alternative to central bank money
While many cryptocurrencies focus on being stores of value (which is good), Ripple’s focus with XRP has been to make it useful for financial transactions: As a large-scale payment network ideal for international currency exchange.
And they started with the big boys.
Large banks from around the world are already collaborating with Ripple to move funds domestically and internationally, including Santander in the U.S. and multiple banks in Canada, Brazil, India, and Singapore.
Also, Bank of America – that’s right, the second biggest bank in the U.S. – announced that they will be adopting XRP for a large number of transactions. Brenda May of The Coin Republic writes,
Bank of America (BoA) recently announced it will use XRP as its only cryptocurrency for all internal transactions.
Furthermore:
This development significantly supports Ripple’s blockchain solution, showing its great potential for creating a revolutionary blockchain solution in the traditional banking system.
The BoA’s full embrace of XRP signals to the financial sector that cryptocurrencies can be considered legitimate and pave the way for even wider adoption.
Why are they doing this? Because XRP transfers can happen in seconds and cost a fraction of a penny compared to ten minutes with a cost of $25-$50 per transaction using traditional finance’s other methods.
It’s a massive time and cost savings for banks and other financial institutions to adopt Ripple. Period. It’s just more efficient! Tell a business you have a solution for them that will cut costs by 99% and get the job done faster?
Ripple adoption is a no-brainer.
And BoA is a massive endorsement on the banking side of things which gives those who are risk averse a sense of security. That will help to increase consumer adoption of XRP.
Beyond that, though, XRP is setting itself up to become a payment processing method for consumers, too. Chris Murithi with CryptoTale wrote on February 5th of this year,
Banxchange has announced that its XRP Ledger app will launch on Android in 48 hours. The App aims to unlock $437.8 billion in market potential, allowing institutional and retail users to trade XRP Ledger tokens.
Users can buy and trade XRP and other XRPL tokens seamlessly. The platform supports payments via credit cards, debit cards, Apple Pay, Google Pay, and multiple fiat options. Banxchange is already live on eight blockchains, including Ethereum, Polygon, Binance, and Avalanche. The XRP Ledger community is closely monitoring network stability while anticipating Banxchange’s impact on the ecosystem.
Yes, widespread consumer adoption is possible via Google Pay, Apple Pay, and credit and debit cards.
Beyond institutional and consumer adoption of Ripple, there is one that may be an even bigger deal…
World’s biggest payment network eyes Ripple
That biggest boy? The federal government of the United States.
You likely have already heard that President Trump’s administration is moving to make crypto adoption more widespread for its utility and efficiency.
What you may not have heard is that the Federal Reserve is actively investigating integration of XRP technology into their payment network. Peter Mwangi with Coin Edition writes,
The U.S. Federal Reserve is making progress in exploring how to add Ripple’s XRP technology into its FedNow payment system, with a focus on Ripple USD (RLUSD).
Why is the Fed doing this?
This move is meant to use blockchain technology to boost transaction speed, reduce costs, and increase efficiency within the Federal Reserve’s real-time payment network.
The integration of RLUSD into the FedNow system will help streamline financial transactions, offering a solution that bypasses the inefficiencies associated with traditional payment methods. Backed by U.S. dollar deposits, government bonds, and cash equivalents, RLUSD ensures both transparency and stability.
And then there are the interesting facts that Ripple has brought on people who were formerly with the Treasury Department and that the federal government is putting together forums that include Ripple to discuss crypto. These indicate that Ripple is in a place where they could have a major influence on the federal government’s crypto policies.
Ripple: Solving real-world problems for banks and institutions
A lot of crypto tokens seem to be solutions in search of problems. Ripple is the opposite, in my view. One of the oldest, most established cryptocurrencies developed with a very specific use case in mind. Ripple has been embattled, but its regulatory struggles seem to be over – and that means it’s quite possibly the best time ever to diversify your savings with a Ripple IRA.
Crypto generally and XRP specifically are poised for a massive increase in acceptance and use worldwide. When demand surges, Ripple’s fixed supply virtually guarantees big leaps in price.
With all that in mind, right now is the perfect time to consider whether diversifying your long-term retirement savings with cryptocurrency is a smart move for you. Make no mistake – even with a bulletproof use case and a solid track record of adoption, crypto is a volatile asset. Its incredible growth potential isn’t for everyone.
If you’ve made up your mind and Ripple (or crypto more generally) is a wise choice for you, you can open your Digital IRA right now in just 10 minutes. Ten minutes right now could put your retirement a decade closer!
Alternately, you can learn more about the benefits of diversifying with cryptocurrency in the free Insider’s Guide To Digital IRAs.
