SEC vs. RIPPLE: Round 2
ROUND 1 RECAP
In the first round of SEC vs. RIPPLE, we learned about the SEC filing of a lawsuit against Ripple Labs, Co-Founder Chris Larsen, and CEO Brad Garlinghouse. We also went into the technical aspects of the digital asset XRP, XRPLs decentralized exchange, and some of the influencers from both sides. In round 2, we will look at how the world views Ripple, their ambitious plans with Energy Web. With their EW Zero application, this enables individuals, businesses, or in this case, an entire blockchain ecosystem to transition to verified zero-carbon electricity.
Despite recent events with the SEC, Ripple still has global relationships with over 400 companies currently using RippleNet. The United States is the only country pushing for XRP to be deemed a security. A clear statement backing Ripple was made Monday by Japanese based financial services company SBI Holdings. “Under Japanese law, XRP is a cryptocurrency asset.” This column was originally published as “US SEC that sued Ripple.” by Mr. Sadakazu Osaki, a fellow of Nomura Research Institute. Other countries that don’t consider XRP a security include the UK, Switzerland, Singapore, and The United Arab Emirates.
Let’s step back and look from a macro perspective at how XRP helps SMEs, the underserved, and the unbanked worldwide.
We start with this powerful example; you are a customer in the U.S; a family emergency suddenly occurs. Your loved one in Mexico is out of medicine, and you must act fast as you are their only hope. Neither of you has a bank account, so the only place to complete the transaction is a local money transmitter. The medicine costs $10 USD, but the minimum to send is $25 plus the international fee of $40 USD (these prices do not reflect actual fees). Thank goodness you just got your $75 check from your PT job; things will be very tight for the rest of the week.
The reason for the drawn-out mini-story, the last time it was recorded in 2017 by The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution, 1.7 billion remained unbanked worldwide. Out of that enormous number, 5.4% ( 7.1 million) of U.S. households were without bank accounts. You might be asking yourself, “How does this all tie into XRP?”
Bitso (based in Mexico) partnered with Ripple in 2018 to build and test a solution for the problem of slow and expensive cross-border transfers from the U.S. to Mexico. Using RippleNet’s On-Demand Liquidity (ODL) service, the company can convert U.S. Dollars into the digital asset XRP, then send the XRP via Bitso’s banking partners where it is exchanged for Mexican pesos, all in less than a minute.
Remember the customer with family in Mexico, using distributed ledger technology (DLT)? The customer can simply use his cell phone, search Bitso, and send his USD for MXN pesos in minutes; for pennies. How critical was the scenario I just described for the individual? Millions worldwide face these same challenges; this is where the relationship between the IMF (International Monetary Fund) and Ripple (XRP) comes into play.
I know - it took long enough to explain. :)
XRP NAMED “QUASI MONEY” by IMF:
In 2017 former IMF Managing Director Christine Lagarde (Pres. ECB currently) assembled an advisory board that included Ripple’s co-founder Chris Larsen. Larsen was chosen to discuss different techniques on how blockchain and other emerging technologies could streamline some of the activities carried out on a macroeconomic scale for the IMF.
Lagarde did warn banks that they would need to step up and adopt new technologies that would benefit their customers' experience. Ripple is the technology company Lagarde believes will help banks reduce expenses, accelerate settlement speeds to seconds compared to days, and provide a low carbon, green digital asset.
The Managing Director for the IMF is presently Kristalina Georgieva; The IMF Statistics Department released (Treatment of Crypto Assets in Macroeconomic Statistics-IMF STATISTICS DEPT.) In the report, they describe crypto assets as BLCAs (Bitcoin Like Crypto Assets). Also, digital assets based on DLT are designed to work as a medium of exchange. Examples of BLCAs are Bitcoin (BTC), Ethereum (ETH), EOS, Ripple (XRP), Bitcoin Cash (BCH), Stellar (XLM), and Litecoin (LTC).
BLCA is often used in reference to all crypto assets. However, in their report, it is used specifically to indicate which crypto assets are designed to serve as a general-purpose medium of exchange for peer-to-peer payments, with no issuer and no counterpart liability. In a peer-to-peer system, the central party is replaced by a framework of internal protocols that govern the system’s operation and allow the verification of transactions to be performed by the system participants themselves.
From the very beginning, users of the XRPL could use a fully decentralized exchange built into the protocol. There is an 80/20 vote ratio on the XRP Ledger, validators that Ripple has no control over; so, unless 80% of the validators agree, an IP (Improvement Proposal) would not be implemented. With Ripple only controlling ten validators (approx. 33% voting rights), the other 25+ validators make it impossible for Ripple to implement anything on their own. As a result, anyone who says Ripple controls XRP can see that it is not technically possible.
RIPPLE CARBON NET ZERO BY 2030?!
In an announcement made 09/30/2020, Ripple pledged to achieve carbon net-zero by 2030. The partnerships with the XRP Ledger Foundation, Energy Web, and Rocky Mountain Institute to decarbonize public blockchains—starting with the XRP Ledger through the use of the new open-source EW Zero tool. Additionally, Ripple is driving new research with leading universities that evaluates energy consumption across digital assets, credit card networks, and cash.
The partnership of Energy Web, XRP Ledger Foundation, and Rocky Mountain Institute addresses a significant environmental challenge for blockchain companies worldwide. Their widespread decarbonization of a public blockchain will be a first of its kind. It will ensure the computational power used is processed with renewable energy assets called energy attribute certificates (EACs). Energy Web’s open-source application, called EW Zero, enables individuals, businesses, or in this case, an entire blockchain ecosystem to transition to verifiable zero-carbon electricity.
- Disclaimer - The views, thoughts, and opinions expressed here are the author’s alone and do not reflect or represent the views and opinions of Cryptowriter or Voice.
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