The XRP Factor. The new global financial system?

A GLOBAL CURRENCY OR A GLOBALLY SEAMLESS SYSTEM?

Not too long ago, this author laid out the details of the quantum financial system (the QFS) and the implications for a new system of commerce and potential financial sovereignty.

Ripple — the underlying ledger for XRP — and its InterLedger Protocol (ILP) was designed to solve a pressing issue in the blockchain space: The ability of a decentralized app to purchase resources without being restricted to a particular blockchain network.

As of July of last year (2020), this is what the Interledger Protocol Family looked like.

Upon first blush, this ecosystem appears to be highly centralized (and it is), replete with some institutions that those of us in the defi space would rather do without. Be that as it may, a solid forking system with a digital dollar that is backed by a fungible handbasket is far better than what we’ve been using for our sovereign currencies to date (more on this in a moment).

It is also critical to understand why Bitcoin cannot serve in this same capacity.

Apparently there have been challenges with this, so it is not clear as to whether or not Starlink or another advanced satellite network is being used, but we do know from intelligence sources that satellite linking has been very active as of late.

We also know that Codius and Polysign provide solid smart programming and custody solutions that comport with XRP. Even more important would be their ability to support Standard Custody under its own banking charter.

It is not important that XRP is only trading at $1.55 at the time of this writing, as there are likely many reasons for this, not the least of which is onboarding people to this new system. What is very curious to note is that a Ripple board member is signing the new Treasury notes, not long after XRP’s was apparently being sued by the SEC, at which time its price took a major hit.

We also know with a high degree of certainty that the currency war between Bitcoin (and now Dogecoin) and FIAT, is actually a proxy war for certain financial actors making a play against the real USD Treasury note.

Well, it is. For now.

THINKING BEYOND THE BLOCKCHAIN

Apart from the more obvious collapse of the “old” financial system in which the stock market is trading at all-time highs despite no correlation to corporate revenues, and cryptocurrencies trading at ridiculous multiples without any real fundamentals, we also know that different versions of the USD are being minted and circulated, as in the case of “blue notes”, and a recall on physical coins over the last year.

Keep in mind that these products do not, by default, denote actual physical inventory (bullion or coins).

CUSIP, an acronym for the Committee on Uniform Security Identification Procedures, is essentially Wall Street’s and the banking industry’s way of barcoding financial instruments.

A 55-year-old system founded by the American Bankers Association, CUSIP currently holds data on about 44 million financial products. To date, over 93 precious metals products have been coded with CUSIP identifiers.

Now the CUSIP’s alleged powers appear to have been usurped, or are being repurposed for this new system.

It’s no wonder then that we’ve experienced short squeezes on precious metals like gold and silver.

Indeed, the Ripple team features some very prominent Wall Street and Silicon Valley players, but the real question now is: Are they playing for a different team?

While conventional wisdom suggests that Silicon Valley is replacing Wall Street, it might actually be the case that both are being replaced by this new system.

LOOKING FORWARD

Another critical element to observe is the battle over banking services, as evidenced by recent moves to place them within the postal infrastructure.

This might appear to run counterpoint to the XRP factor, given Ripple’s ties to the SEC, but it is also the case that Ripple’s main point-person for this — a former Treasury employee who describes herself as a currency designer — is pegging Ripple’s development to the real USD Treasury note.

It is also apparent that this development involves a fungible SDR (selective drawing rights) handbasket tied to — you guessed it — precious metals.

If this is in fact the case, rumors about a global digital currency resembling the old FIAT system, and exemplified in CBDCs (central bank digital currencies), would give way to a mechanism that actually hedges against inflation.

However this plays out, it’s safe to say that in the next several months, we may be using an entirely new financial apparatus, with many new opportunities to actually decentralize our financial capabilities.

As this author can only map out the optics of this crazy game, fasten your seatbelts, folks… Things are getting very interesting.