Ripple : 2 reasons I think another credit crunch / recession could accelerate xrp adoption

Ripple update: 2 reasons I think another credit crunch / recession could accelerate xrp adoption

The credit crunch of 2008 was in large part due to uncertainty as to which banks were critically exposed to bad debts and therefore banks were reluctant to extend credit etc ( the current process of cross border settlement is a form of credit extension as there is trust involved ) Xrapid with atomic swaps (all the money moves or none of it moves) removes this need to extend trust / provide credit. Central Banks had to pull out all the stops in 2008 to try keep funds flowing and provide confidence to the banking sector to keep working with each other. Xrapid facilitating capital flows that may otherwise slow down or cease would have a positive effect on Central Bank monetary policy effectiveness. Ripple working with 40 – 50 banks……

Secondly given the changes in Basel rules funds sitting in Nostro Vostro (ours and yours) can no longer be counted towards capital reserve requirements (the level of actual cash that needs to be held by banks) thus a recession and credit drying up would further incentivise banks to adopt Xrapid freeing up these dead funds to either meet their reserve requirements or stimulate the economy as incentivised by the Central Banks either by carrot or stick. A further thought is that when Xcurrent and Xrapid reach a tipping point you may see banks particularly in a time of economic uncertainty only doing business with banks that use Xcurrent and Xrapid further accelerating global adoption.

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About Ripple (XRP)

Ripple connects banks, payment providers and digital asset exchanges via RippleNet to provide one frictionless experience to send money globally. Banks and payment providers can use the digital asset XRP to further reduce their costs and access new markets. XRP is the fastest and most scalable digital asset today.

Author: KINrocks

Score: 11

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