We all understand the corrupting influence of greed. We really do.
There are a lot of 'old guard' correspondent banks out there that make fantastic sums of money from inefficient payments. These transfer fees are measured in the billions, and they are charged by the oldest members of the SWIFT network. These large banks are monetarily incentivized to resist change for as long as they possibly can, even as new technologies spring up that promise to completely dis-intermediate them from the larger global economy.
All banks - including these large correspondence banks - must either change, or face a rapidly - declining market share.
The world, however, cannot wait for them to wake up on their own. The global economy is facing a plateau of a decade-long cycle of growth, and must either change and continue expansion, or rely on its old, legacy financial infrastructure and curtail that economic progress.
Most of us, if given a choice, would undoubtedly vote for change.
A case in point is the technology used by Ripple; it provides real-time settlement of cross-border payments, resulting in transactions that can move money from one country to another with a friction-less experience for the customer. And it does so at an undetectable cost, with the only associated charges being those that member banks choose to add on.
Trust-less, no-counter-party digital assets will play an increasing role in global commerce. We're seeing increasing volumes of transactions happen through crypto-assets, and a portion of that volume is comprised of non-speculative demand, reflecting payments that are facilitating cross-border transfers of value.
So what happens when we take a multi-day transaction, which used to cost a material percentage of the amount transferred, and change it to:
- Near-zero cost
Well, as it turns out, we have some real-world examples to look at. The first and most dramatic example is that of email versus postal mail.
The transition from postal mail to email was breathtaking. When email moved out of the collegiate setting and into the domain of the general public, it was observed that the number of transactions increased by many orders of magnitude of the original count of postal mail. 1
People ended up sending many times more emails to each other because new technology moved that slow, multi-day transaction from a relatively high-cost per message to:
- Near-zero cost
Now, think about global transfers of money. Have you had the pleasure (or inconvenience) of wiring money from your bank account to a digital asset exchange recently? How long did it take? In some cases, banks have improved the speed and lowered the cost, but if that digital asset exchange is located in a foreign country, or in another time zone, my guess is that the transfer took multiple days to clear, and cost a measurable amount of money for you.
What if you could move money instantly from your bank account to a crypto exchange, or vice versa, all within minutes or even seconds?
The effect on the global economy of implementing the financial technology innovations represented by Ripple could be profound. There is resistance from those organizations that stand to lose their place in a failing, legacy financial infrastructure, but we as customers will eventually move them aside or force them to change.
We've seen the beginnings of the battle for these large correspondence banks to try and keep their place, and it's taken some turns that even I didn't expect; I did not expect to see the CEO of SWIFT debate the CEO of Ripple, but it happened. And I thought even SWIFT would eventually play a more progressive role, but instead they are opting to play a protectionist role for the market share of their member banks, at the expense of the global economy.
Other international organizations have already seen the light, thankfully, such as the IMF and even members of the European Parliament, and they know that the future lies with technology that promises to supercharge global commerce and cross-border payments, not with maintaining the 'status quo' of large correspondence banks.
It's now clear that real-time, low-cost cross-border payments are the future; and Ripple, with its laser focus at being the 'best at payments' is standing on the right side of history.
Who To Follow: Christine Lagarde
For those of us that have been following blockchain technology and digital assets, Christine Lagarde is a name that comes up often.
She is the current Managing Director of the International Monetary Fund, or IMF, for short, the international organization composed of 189 countries that uses economic policies to advance sustainable economic growth and reduce poverty.
Christine Lagarde was first elected in 2011, and has been reelected to a term that will eventually end in 2021.
While some financial icons have been vocal at attempting to dismiss digital assets, and even blockchain technology, Christine Lagarde was not one of them; in fact, very early on, she supported efforts at discovering more about the technology, and has since talked about the burgeoning global market in several speeches.
In 2017, she formed an advisory group composed of fourteen notable fintech entrepreneurs and industry leaders, including Chris Larsen, the Chairman of the Ripple Board of Directors.
Since then, the advisory group has expanded to nineteen members, and has met several times to provide findings, recommendations, and guidance to the IMF.
In addition, Christine Lagarde has spoken about the topic on more than one occasion, including a speech at the Singapore Fintech Festival in late 2018. At that conference, she concluded one of her presentations with:
"... I have tried to evaluate the case this morning for digital currency.
The case is based on new and evolving requirements for money, as well as essential public policy objectives. My message is that while the case for digital currency is not universal, we should investigate it further, seriously, carefully, and creatively.
More fundamentally, the case is about change—being open to change, embracing change, shaping change.
Technology will change, and so must we. Lest we remain the last leaf on a dead branch, the others having decided to fly with the wind."
She has prompted the IMF and its participant countries to take blockchain technology and new innovations brought by fintech seriously; and it's clear that even though some large banks don't want their status in the aging, legacy correspondent banking system to change, world leaders represented by the IMF have a very different viewpoint.
Change doesn't happen on its own, and Christine Lagarde understands this, as is demonstrated by her tangible steps to bring focus and attention to the fintech innovations represented by blockchain technology. It's for this reason that I recommend that you 'give her a follow' and support her efforts at serious debate and consideration of digital assets:
Ripple's philanthropic choices in the past have been some very high-profile choices that accompanied significant financial contributions. I don't think I'll ever forget the massive donation to DonorsChoose, the organization that matches individual teachers' requests with donations from online contributors.
In that instance, Ripple decided to match every request in existence at the time, and it totaled to a massive $29 million dollar donation.
Other philanthropic efforts have included the formation of the UBRI - the University Blockchain Research Initiative - which has funded more than 29 worldwide secondary educational programs focusing on blockchain technology and its applications.
These efforts are not only limited to financial support, but also include collaborative talent-sharing in the case of the Gates Foundation's Mojaloop Project to bring financial inclusion to the un-banked in developing areas of the world.
And on March 7th, Ripple announced that they were donating to an organization called Tipping Point to help fight poverty in the San Francisco area, near their West Coast headquarters:
Tipping Point has been in operation since 2007, and focuses on a diverse set of activities designed to solve the challenging problems associated with urban poverty in the San Francisco Bay area: 2
The organization has what I would term a scientific approach to problems such as homelessness, and has endeavored to understand the problem associated with the San Francisco area versus other urban areas, along with strategies to combat it. 3
Kudos to Ripple for donating such a large amount to a local charity where their company is headquartered; oftentimes it makes sense for businesses to look around locally when considering philanthropic endeavors, and I think this is a great cause for Ripple to champion.
The Interledger Twitter account formally announced the pending "Interledger Summit 2019" on March 7th:
The event is billed as a "Developer Summit," so my guess is that this event is going to be the first of multiple summits to allow Interledger's growing numbers of developer stakeholders to meet and exchange information and ideas.
The official public invitation for the event states: 4
"The Interledger Protocol (ILP) is the open standard for moving value across blockchains. We believe the Internet of Value is achieved by enabling more blockchains and applications to integrate with Interledger and increasing the currencies available on the network.
The two-day hackathon style event will include demos from Interledger companies, discussions around new integrations and an opportunity to test new tools developed by the community."
It sounds like an event that is marketed and aimed squarely at community-based developers, which is an interesting change from what we've seen thus far about ILP. While the protocol has always been something that Ripple, Coil, and other stakeholder companies have championed, there hasn't (up until now) been a ton of community developers using ILP until Wietse Wind decided to work informally with some of the Coil team members in 2018.
The conference is scheduled for April 5th and 6th; it may herald a new groundswell of community-sponsored development activities from new businesses and individual hobbyists.
Coil has been actively putting out code to help community developers with various handy tools and tasks, and some of these unique creations have come from one of their developers named Ben Sharafian.
Here are a few recent tweets where he points developers to his open-source code on Github, so they can download and try using some of the ideas for themselves:
The above two are unique code ideas that help Coil early adopters customize their site, and the last one has to do with restricting content so that only browsers with Web Monetization enabled can see embedded YouTube content:
The link in the above tweet goes to a web page that will generate code that you can then use to embed in your website, specific to YouTube videos, but if you're a clever coder, you could use it to restrict other content as well.
It's this type of active community involvement that will propel Coil into common usage eventually, as website creators decide that they'd like to earn additional revenue streams for their own creative content. I look forward to seeing more of these code examples from Ben Sharafian and other Coil developers, and also from creative community developers that are monetizing their own sites.
XRP Version 1.2.0 is official.
The voting period for the new XRP Validator amendments ended in February, and version 1.2.0 is available for existing or new community validators. The official introduction to the new version in Ripple's Developer Blog details the fixes, amendments, and instructions for upgrading. 5
The new version's amendments included:
The amendments were narrow in scope, but exemplified the code governance process for XRP, which requires two weeks of evaluation and support by at least 80% of the network validators. 6
Bounty Hunters Wanted
Wietse Wind, in collaboration with other XRP Community developers that received payouts for helping various exchanges implement XRP integration, have established an XRP Community Fund.
The fund has been used for a variety of costs that you can view on its home page, including Slack channel funding, helping Thomas Silkjær cover costs of data research, and a project that Wietse cannot yet publicly disclose.
In addition, on March 8th, he announced that a new bounty was being financed by the community fund:
The bounty will go to a community developer that can develop a "WooCommerce" payments plugin. If you're an interested developer, or might know somebody with the necessary knowledge to develop the plugin (and claim the bounty), here is the link to the XRP Community Fund site where you can find more information: XRP Community Fund
Children On The Edge
Children on the Edge is the name of a UK-based charity that seeks to help children located in some of the most dangerous parts of the globe, who live in conditions that are reflective of refugee status in their resident country.
The charity helps children in Eastern Europe and Asia, including in Bangladesh, Burma, India, Thailand, and Uganda. 7
One of the members of the XRP Community, @cpilots2017 (Jason Langston's Twitter avatar) decided to use the XRP Tip Bot for raising funds for Children on the Edge, and wrote a blog about his efforts, and to introduce the charity, on December 19th of last year.
In addition to using the XRP Tip Bot and being a member in good standing of the Good Souls Group (a.k.a., "XRP Charities"), Jason also decided to sponsor Children on the Edge by combining fundraising with running; he is planning to run in the Brighton marathon in April, combining it with a fund-raising campaign.
And recently, after contacting Ripple, he was surprised when he received a response, which led to him subsequently acquiring a set of signed t-shirts! The t-shirts were signed by Ripple corporation executives and board members such as Chris Larson, Brad Garlinghouse, and Ron Will. In a video broadcast on Bob Moneybags' YouTube channel on March 7th, he showed the signed shirts and talked about his fund-raising, along with Eloise Armstrong from Children on the Edge:
The signed shirts will no doubt be subject to interest from the XRP community. In his follow-up, Jason indicated that he would be holding a raffle to distribute the shirts:
To enter the raffle, he indicated that individuals - on Twitter - must do the following:
- Retweet, tweet, or reply to his tweet
- Tip @cpilots2017 5 XRP using the XRP Tip Bot
- Include the hashtags "#childrenontheedge" and "#XRPforgood"
Note that entering the raffle doesn't guarantee that the t-shirts will be distributed; the Good Souls Group is setting a 1,000 XRP minimum for the raffle before the t-shirt(s) are distributed.
My hope is that all of the t-shirts are distributed, and that Jason ends up raising thousands of XRP for Children on the Edge!
Fidelity stoked the fires of imagination in October of last year, when they released information about their new crypto company, Fidelity Digital Asset Services, which was targeted at providing both custody and exchange services for institutional clients. 8 9
Fidelity has since been working on its new platform, and recently officially announced that they'd gone live in a type of 'beta' release with a subset of their 'eligible clients:'
Fidelity's comments in their official announcement underscore a growing interest in digital assets from institutional clients: 10
"Our conversations with a variety of institutions have served to underscore their clear need for a trusted platform provider in order to engage with digital assets in a meaningful way.
We are committed to exceeding the requirements and standards of existing solutions with both our custody platform and trading venue — providing a combination of security and a central point of market access, disrupting the obfuscated nature of trading digital assets today."
Fidelity is a traditional, large-scale investment company. The advent of its Digital Assets service, and its implied reflection of a growing institutional demand, illustrate the role that trust-less, no-counter-party digital assets are destined to play in the global economy.
SBI Re-Targets July Date for VC Active Trading
One of the biggest news items in the last few days was SBI's decision to further delay their real-time trading of XRP and other crypto-assets until July of this year. The official announcement was made contemporaneously with a presentation provided at the Daiwa Investment Conference in Tokyo on March 6th by Yoshitaka Kitao, SBI's CEO.
The content was contained in a slide that communicated the updated schedule, postponed to July of this year: 11
The announcement indicated that the decision to delay real-time trading was due to additional, recent requirements that were introduced in Japan, requiring SBI to use a private-cloud solution to enhance their security infrastructure.
Yes, I was disappointed, as this marks the second delay of real-time trading of crypto-assets on the SBI collection of retail investment platforms. Their customer base is massive, and XRP fans have been anticipating the addition of the SBI VC exchange; it would provide a valuable and potentially high-volume liquidity endpoint in Japan.
The viewpoint he expresses is shared by not only me, but by many others in the XRP Community. SBI will, after launching, be one of the highest-profile exchanges worldwide, and certainly one of the top choices in Japan.
Additional steps and time necessary to validate security are welcome if the leadership at SBI deems them necessary.
There have been a number of large centralized exchanges that have recently been adding the capability to support peer-to-peer OTC purchases as well as their real-time order books. HuobiGlobal OTC sent out an official announcement that they'd added XRP to their own OTC platform, as of March 7th:
Huobi has been a competitive global exchange in crypto, and continues to post significant volume numbers in the face of increasing competition.
The addition of Huobi expands the number of exchanges where large investors and institutional clients can access OTC trading for XRP.
QB.com is a centralized exchange based in Hong Kong. The exchange offers a mobile application in addition to its web-based platform. Their blog indicated that they began operations in 2013.
On March 8th, QB announced that they would be supporting four pairings with XRP, starting on March 11th:
It's not known what the volume numbers are for QB yet, but hopefully we'll find out more if the exchange decides to share its volume numbers with consolidator reporting services. It's a welcome addition as an Asian end-point for XRP liquidity.
The World's Economy Needs Us
The global economy is at a cross-roads after so many years of growth; to expand further, it needs to adopt new ways of transferring money, and support entire new industries and business models.
Micropayments, once thought to be an infeasible barrier for many businesses due to the cost of transaction processing, have now been opened up thanks to a combination of blockchain technology and the use of digital assets. Coil-based businesses are a perfect example of what may happen globally as small businesses develop new revenue streams that were once unprofitable.
And smart contracts have only begun to be explored; we've seen some creative examples of smart contracts spring up with sharing economy apps that have appeared around us in large cities; these apps are enabling new revenue models for businesses while making life more convenient for citizens.
The aging legacy infrastructure of correspondent banks have chosen their future, signaling that they'd rather protect their shrinking market share of cross-border payment processing rather than adopt new technology that can speed payments and lower the cost to a fraction of a cent.
For the rest of us, we know that the march of innovation, while being obstructed at various points, is inexorable; the worlds' economies need to push for change, and do it quickly. Ripple technology is well-positioned to help banks, remittance companies, and large corporates transfer money instantly; and digital assets can help settle these payments in many of the high-volume corridors, enabling the elimination of reliance on Nostro accounts.
If you've made the decision to purchase digital assets like me, the future is something that we look forward to with eagerness; the future of payments is on its way, and there is one digital asset with the combination of security, scalability, decentralization, and speed that can support global transaction levels: XRP.
Sources and Credits:
Cover Art: Thank you to Skye Studios on Unsplash
- https://ripple.com/files/fsr_gifford_cheng.pdf (p. 144)