On Ripple
Those who know my critical position towards cryptocurrencies will be surprised that I talk about Ripple. And I wouldn't be talking about it, except that the SEC is getting hysterical trying to stop it, of all applications of blockchain.
Let's start from the beginning. What is Ripple? Ripple is a technologically mature application of blockchains, but instead of being oriented towards the movement of cryptocurrency, it takes the possibility of transferring money and other commodities (in the form of contracts) to the extreme, with a very low price and equally high latency. low.
So far, you might say, what's the problem? The problem is that Ripple enters into competition with the swift circuit, and the competition is serious. The financial entities that are using it (and acting as validators) include the following:
Name |
Country |
|---|---|
| Mitsubishi UFJ Financial Group | Japan |
| HSBC via SABB | United Kingdom |
| Bank of America | USA |
| Crédit Agricole | France |
| Sumitomo Mitsui Financial Group | Japan |
| Mizuho Financial Group | Japan |
| Santander Bank | Spain |
| Barclays PLC | United Kingdom |
| Royal Bank of Canada | Canada |
| Toronto-Dominion Bank | Canada |
| UBS Bank | Switzerland |
| UNICredit | Italy/Germany |
| ABN AMRO | Netherlands |
| Saudi Arabian National Commercial Bank | Saudi Arabia |
| National Bank of Kuwait | Kuwait |
| Axis Bank | India |
| MoneyGram | USA |
| SBI Remit | Japan |
| American Express | USA |
| PNC Bank | USA |
| Siam Commercial Bank | Thailand |
| Standard Chartered Bank | United Kingdom |
| Cuallix | Mexico |
| Canadian Imperial Bank of Commerce | Canada |
| Kotak Mahindra Bank | India |
| Itau Unibanco | Brazil |
| Mitsubishi UFJ Financial Group | Japan |
| Indusind | India |
| IstaREM | Singapore |
| BeeTech | Brazil |
| Zip Remit | Canada |
| LianLian | China |
| RAK Bank | UAE |
| TransferGo | UK |
| Currencies Direct | UK |
| AirWallex | Australia |
| SEB (Skandinaviska Enskilda Banken) | Sweden |
| Krung Sri | Thailand |
| Silvergate Bank | USA |
| Metropolitan Commercial Bank | UK |
| JP Morgan Chase | USA |
| National Bank of Australia | Australia |
| Credit Agricole | France |
| Massa Chussets Institute of Technologies | US |
The presence of several heavyweights is absolutely visible.
What are they using this BlockChain for?
It depends on interests. MIT, the last on the list, is acting as a validator, because it is of academic interest. Banks and financial institutions are using it instead of Swift, money transfer circuits for money transfer between offices, etc.
In this sense, it is an "adult" blockchain, in the sense that it has a specific industrial use, and to make matters worse it does not have value for its own cryptocurrency, which also exists, but for what it DOES. That is, for the service it offers.
Before we go any further: am I advising you to buy XRP? No. XRP, Ripple's token, does not require energy to create. When a bank starts using it, it pays it a certain number of tokens, which Ripple creates.
Consequently, no increase in demand causes the price to rise: Ripple just needs to create more. When they talk to you about “Mooning”, they are essentially taking the piss out of you, and they are the usual cryptocurrency scoundrels.
I'm talking about a real market due to the usefulness of a technology. Those scoundrels move too little money, compared to other players, to be influential, and they can't guarantee you any return on investment.
In short, the use being made is purely financial/industrial, in the sense that it is a real service that provides value (an almost zero price per transaction compared to Swift).
But so far, I have no reason to talk about it. None of what I said is really abnormal. Banks use a blockchain for their exchange (bank-to-bank, that is), none offer XRP to the public, so they use it as a utility because it costs little.
Nothing special.
So what is the real anomaly?
The anomaly is that the American SEC is waging a war on him like never before, it lost the first round in a humiliating manner, and wants to appeal which will be equally humiliating.
I'll explain.
The SEC must be vigilant against speculation in Securities. For example, Bitcoin is officially a commodity, in the sense that its value depends "only" on supply and demand, and not on a single entity. A Security, on the other hand, can depend on a single entity, for example government debt securities (BOT, BTP, Bund, etc.) depend on a single entity that can issue them.
Who decides what Security is in the USA? The SEC. Precisely for the task entrusted. There are several standard tests that the SEC has chosen to understand what a financial product is, etc.
The absurd thing that happened is that they sued Ripple which they lost, because the court decided that the Ripple token is NOT a Security. The body that supervises the security does NOT know what the security is, when they themselves decide what a security is?
That is, the lawsuit was suicidal, because the sentence was like "according to the canons of the SEC, the SEC cannot say that Ripple is a Security".
It is not the first time in the USA that a court case has been used only as a method to scare investors (which has happened in some US exchanges, but not in the world). In Italy this would be called Lite Meraria.
So what's the point?
The point is that the SEC in the USA has allowed monstrous things to happen, from subprime securities to any other financial perversion, because the USA is traditionally favorable to any financial novelty , and to any innovative financial business activity. This fury is the supernova that exploded in the sky.
This gigantic anomaly is why I'm talking about it. Not only did the SEC throw itself into a suicidal lawsuit, but it lost its face when a court told it that it is not a security, when the SEC is responsible for deciding what is a security or not, and the court used the same criteria used by SEC.
And despite this, the fury continues with a good appeal.
What is the purpose of this fury? Nowadays Ripple is so used in Asia and Europe that it could already make a living from it. The founder, during the first trial, said that in the event of defeat his company would simply leave the USA to move, probably to Asia, where the bulk of its business is located.
So, the SEC could certainly land a coup, but on the other hand if it moved to an Asian country, for example Dubai, or to India (given that the Indian government is looking for an agreement with Ripple because it traditionally struggles to manage the its currency), all countries with anti-American sentiments would have found the alternative to Swift that they had been waiting for for years: making transactions without the USA knowing anything about it.
The SEC's action, therefore, seems aimed at preventing Ripple from operating in the USA, also taking Swift's place. But why'? Why chase away a goose that lays golden eggs from your territory, also losing control of the data?
What's more important?
So, being a blockchain, Ripple uses a public register, a ledger as the fanatics say. The trouble is that, however, American banks are completely opaque.
What does it mean?
Imagine you want to keep the money safe, so that the Italian tax authorities do not know the amount. That is, you want to have an account where no one knows the balance, no one knows how much money you have. What is the best place?
You will be tempted to say Switzerland, Tonga, and other paradises. It is not so'. The best place is USA.
In fact, when it comes to banking data, the US operates with a double standard.
- They do not adhere to the OECD CRS, i.e. the agreement on fiscal transparency. The US does not give data to anyone about the size of bank accounts.
- The USA created Fatca, obtaining (in Obama's time) with threats that all other relevant countries would join it.
The result, that is, is that the USA receives information from the whole world regarding the size of the bank accounts of foreign citizens, or of Americans abroad.
But it does not provide any data on either American citizens or foreign citizens in the US.
If you had a briefcase full of euros and you want to know where to deposit it so that it disappears from the eyes of the taxman, the answer would be "bring it to the USA". Deposited in the USA, that money becomes invisible. It only provides the interest accrued by the account, from which no one can deduct anything because at the end of the day, if an account does not pay interest, the figure will be zero for any value of the deposit.
You would then think that a state like Italy could ask an American body to estimate the wealth of a type: the data are not sent abroad, but could be obtained from Italian banks in the USA, for example to estimate the guarantee to a mortgage, or something else.
Well, no.
Some states, namely Delaware, Wyoming, New Mexico, Nevada, Alaska, Montana, South Dakota, have particular legislation that also prevents internal exchange. The American IRS, or the FBI, needs to move. Otherwise, fat.
Not for nothing, during the Pandora Papers investigation, almost 360 BILLION dollars were counted in the accounts of foreign citizens, in the city banks of Sioux Falls, the capital of South Dakota, alone.
Basically you go there, create a "trust", and no one can associate the account with your name, much less know how much is in the trust.
Interesting, right? (Also because it is suspected that Putin himself has his money in an American trust.) Approximately 1.6 million Italian companies are, coincidentally, based in Delaware. Trusts in Delaware are simple to set up, and are exempt from ANY banking transparency laws. FBI, IRS or no one else.
The USA is the largest tax haven in the world.
You will have understood what I think.
The SEC is protecting American banking secrecy by trying to prevent widespread use of public ledger instruments.
Yes, if something American took Swift's place, it wouldn't be a big deal for the USA. But they prefer to lose control over what could take Swift's place, in order to prevent the breakdown of national banking secrecy.
Moreover, if Ripple left the USA to move to Asia, in addition to attracting even more Asian customers (I mean other big banks), American banks could (but on a voluntary basis) still use it, using Asian branches. So, maybe that's what the SEC wants.
This is why I'm talking about it.
I am not advising you to buy Ripple tokens (I repeat: the risk is too great and the "whales" are so large that traditional cryptocoin whales look like fish & chips).
I just know that, somehow, we will hear more about Ripple.