- Ripple's liquidity-on-demand payment technology has no impact on the price of XRP, according to Chris Larsen.
- The company is willing to work with central banks to promote the development of a CBDC.
As the CNF reported yesterday, Chris Larsen, CEO of Ripple, spoke at the LA Blockchain Summit about a possible exodus from Ripple from the U.S. and a Cold War between China and the U.S. over the financial technology of the future. For the XRP community, however, Larsen's statements about the XRP token and liquidity on demand (ODL) may also have been very interesting.
Larsen expressed his opinion that investors should not expect ODL to influence the price of XRP. According to the co-founder of Ripple, the value of XRP is much more strongly correlated with Bitcoin and Ethereum, rather than the Ripple ODL projects that are currently determining this.
''If you look at the XRP Ledger, XRP the decentralized digital currency, most of what happens in that ecosystem is actually correlated with Bitcoin and Ethereum. It's like $ 100 billion worth of trading a year, say. The vast majority are connected to what is happening in the global market, and are being driven by all the things that drive Bitcoin and Ethereum.''
''Is it a value store? Is it perhaps just holding it as something that we value in a digitized and globalized future? Is it speculation? This is all happening in its own economic reality, completely separate from what Ripple is focused on.''
Larsen also explained that Ripple "continues to make great progress" and positions itself as a corporate blockchain solution. The gateway to Ripple are banks and payment service providers, which already have "100 million customers", as well as large wallet providers, such as Ripple partner bKash, which offers more than 135 million wallets for people in Bangladesh who would not otherwise have a bank account. Larsen further commented on this:
''So it's all these financial institutions that bring in these huge amounts of customers and bring in all the other infrastructures that are not changing here, custody relationships, security relationships, AML. So we think this is a good approach to quickly address these really big networks.''
Jeff John Roberts also asked Larsen if Ripple would consider acting as a consultant to central banks, and if that would open the company to new accusations of being "the sovereign of XRP". Larsen saw no problem with this and explained that ODL is only a small fraction of the XRP market and that the company would like to work with a central bank.
In this sense, Larsen also pointed out good relations with the Bank of England, which is known for having performed a proof of concept with Ripple in 2017, as well as with the U.S. Federal Reserve and institutions in Japan and Singapore. According to Larsen, decentralized currencies, such as the XRP, are a bridge between political and centralized digital currencies:
''You know, you look at ODL, in the last two years it's about $2 billion, so it's a small fraction of the overall experience that's going on in those markets. So I think Ripple is the company - we just look at how you have a fit product/market.''
''So, if there is a suitable product / market with a central bank that wants to exploit digital currencies - absolutely, we will be involved. It is a different thing, but we find it valuable. We think that all central banks should have discussions about a digital currency.''