I’m often asked to update my thoughts on XRP. There have been many changes since writing extensive articles on XRP and how it could fit into the global monetary architecture in a multilateral world. So, with that intent, I present the following.
Please remember that I have always supported Ripple and XRP and contributed a lot of material to the space as an OG. Many in the XRP Community today weren’t even around back then. This community does have a tendency for knee-jerk reactions to perceived criticism of XRP and Ripple. Understand that this is not a criticism but only a high-level re-analysis of the geopolitics and monetary realities that have changed over the years in relation to the ultimate use case for XRP.
First, all my previous opinions were pre-SEC lawsuit and pre-geopolitical earthquakes, which are shifting the world's tectonic plates, such as the war in Ukraine and the expansion of BRICS+. The original assumptions for the mass adoption of XRP on a global scale required the collective agreement of all the major nations to align on the strategy and implement the CBDC bridge capabilities of the XRPL within the existing global institutions, such as the International Monetary Fund, World Bank and Bank for International Settlements. The IMF has shown support for Ripple and XRP, or at a minimum, an acknowledgement of its existence and use case.
China, the world's largest creditor nation, has been very clear in the past that it will not continue to support the domination of these monetary institutions by the world’s largest debtor nation, the United States. China, and other BRICS nations, have demanded that these institutions be overhauled to reflect the realities of a multilateral world. Failure to achieve this would push the other nations to develop a workaround to the Western monopoly over global monetary institutions.
The foundation was already prepared for this eventuality with the BRICS alliance, the BRICS Development Bank, Belt and Road, Eurasian Union, and the Shanghai Cooperation Organization.
The one institution America has the least influence over is the Bank for International Settlements (BIS). So, we now see the BIS announcing the development of its own unified ledger, which has all the same functional features as the XRPL and will be controlled by the central banks themselves instead of a decentralized ledger that no one interest controls. The biggest challenge for Ripple was always going to be how do you get the banks to give up control over the core structure of the monetary architecture. Private side ledgers are not as ideal a solution as many would consider.
Most central banks have announced a CBDC initiative. It is very clear the world is moving in that direction with full control of the BIS and the central banks remaining. Along with the announcement of the BIS unified ledger, the mass adoption of the XRPL began to lose focus.
The Bank for International Settlements will eventually force the alignment of the BRICS+ reserve currency across all central banks as the IMF and World Bank are either overhauled or fade into history. But first, the geopolitics must be worked out on multiple battlefields, as power is never relinquished willingly. It should be obvious to everyone that Ukraine will fall, and Poland will have to move into Western Ukraine to serve as a new buffer between Europe and Russia. This strategy will eventually fail as the EU fragments, and NATO becomes a defunct defensive/offensive organization with no purpose.
The USD-based unipolar monetary architecture has run its course and with-it American hegemony. A possible end is in sight for the centuries-long great war for control of Eurasia. Now the new non-Western system is being built. The best opportunity for the XRPL would have been in a peaceful transition where all nations agreed upon the structure and fundamentals of the new system. This is not the case, and the disagreements are only just beginning. There will likely be a lot of back and forth around the development of the BRICS supra-sovereign currency and the massive restructuring of sovereign debt that will inevitably have to be dealt with.
We will likely see various competing monetary alternatives with different structures. The XRPL could see some success as patchwork alliances are agreed upon. Still, eventually, the world will have to align on one architecture, which will likely be determined by the interests supporting BRICS with the additional support of the BIS. Western nations will have to make concessions to restructure the sovereign debt. China, the world's largest creditor nation, will have a lot of influence over this.
With each passing month and year, decentralized ledger technology is improving. The XRPL is forced to continue developing to keep pace with what other projects are rolling out. This isn’t to say that the XRPL isn’t a fantastic piece of tech because it simply is by all measures, but things are moving fast. Global institutions, like the BIS and other blockchain developers, are learning faster, developing faster, and building more extensive tech that can be leveraged across multiple Web2 and Web3 platforms. This will be an integral part of connecting the old and new worlds.
The SEC lawsuit was, in my opinion, an attempt by traditional banking interests to sabotage XRP, defame the founders of Ripple, and create enough negative energy in the space to drive support toward more official innovation, such as CBDC’s and the BIS unified ledger. Abstractly, there was no win possible here for Ripple and XRP. The lawsuit intended to send a message to other banks, institutions, and governments.
Then there is the revolving door of people who move in and out of government and private employment. The legacy and corrupt banking system has been supported through such revolving doors, as policies are passed with legislation that is written by the same people who move in and out of the public and private spheres. Ripple has also had its share of revolving-door employees who move in and out of public and private spaces. This can be interpreted a lot of different ways, some good, some negative, but ultimately, if you are a foreign monetary policy maker sitting in Moscow or Beijing, watching the revolving door with Ripple does not build trust or encourage non-Western nations to partner with Ripple or adopt the XRPL as a core part of their monetary architecture.
XRP will always be around, as the tech is that good. But the potential realization of its ultimate use case is fading with every bomb that drops, every new member that joins BRICS+, and every day where uncertainty continues. Whether retail XRP is not a security or institutional sales are, it doesn’t matter at this point. It was never about that.
This is just one opinion and one analysis, but worth consideration if you are invested in XRP.
HODL - JC