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