11th June 2024 > > Ripple Labs Inc.

tl;dr

Some good stuff and some bad stuff from Ripple Labs.

Market Snap

Market Wrap

BTC has dropped overnight on the news that we have had one day of net outflows from the ETFs following a 19-day unbroken streak of inflows. This reaction looks a little overdone to me. Also, we do have US inflation data out today. The uncertainty of how a few select individuals at the Fed will interpret that data will have global ramifications for all assets, and especially cryptos.

Long-term investors using DCA will take advantage of these temporary bouts of price weakness.

Occasional Series – Political corruption

Thursday May 6th 2024 – Ahead of a trouncing at the polls, Rishi Sunak nominates Jamie “you can’t fire me” Dimon, CEO of JPM, for a knighthood.

Friday 4th October 2024 – just three months after a trouncing at the polls, Rishi Sunak joins JPM as a non-executive director earning a seven-figure salary for two days of work a month.

Just sayin’ is all.

Curious Cryptos’ Commentary – Ripple Labs Inc.

Ripple Labs has partnered with Clear Junction to provide instant GBP and EUR cross-border payments at low cost. More currencies will follow. Dima Kats, Founder and CEO of Clear Junction, explains the significance of this development:

“Blockchain technology and cryptocurrencies will definitely be at the core of the evolution of correspondent banking and we are happy to partner with Ripple to be a part of this process.”

One more addition to the ever-expanding list of crypto use-cases, though the naysayers remain blind to these developments.

Sometimes Ripple gets it right.

…

Ripple Labs has announced a deepening of its relationship with the Republic of Georgia. The objective is to explore means of digitising the local economy, which is a laudable aim in itself.

Unfortunately for the residents of Georgia, the plan is to build a digitised economy on top of the local currency lari CBDC. Ripple won that contract in competition with nine other companies, all desirous of an invasion of our financial privacy.

Sometimes Ripple gets it wrong.

…

It’s not just Georgia of course.

Ripple is working with several countries to introduce CBDCs including Columbia, Bhutan, Pulau and Montenegro. The big fish – China and Russia – are developing their own CBDCs with no outside interference in the level of financial coercion and control they can embed in their respective projects.

Ripple has also released a 23-page whitepaper in support of CBDCs:

https://ripple.com/reports/CBDC-Digital-Evolution.pdf

In general, this whitepaper skirts all the downsides – bar one which we will get to in a minute – of a CBDC, downsides that open the door to a dystopian future of financial control and coercion. It focuses on the upsides, upsides that are enhanced with public blockchain technology, a far superior product to CBDCs.

The one downside it does admit to, is presented with incredible chutzpah as a positive. Glowingly quoting The Bank Policy Institute (an organisation which can recognise a mortal threat to its existence presented by the crypto revolution), this is a shocking statement:

“[The most significant benefit] is the potential for interest rates to no longer be constrained by the zero-lower bound (ZLB), assuming that a CBDC could pay negative interest and paper currency were eliminated.”

Government theft in the form of over-taxation is one thing. Government theft of your savings account is way scarier for it will be carried out by a supposedly independent central bank (it isn’t) whose members are not subject to a democratic process.

It gets worse.

“… CBDCs can incorporate design features that ease policy transmission, such as directly distributing currency to the public in lieu of checks (like those distributed through the recent COVID-19 relief packages in the US).”

There you have it in black and white. CBDCs can help facilitate a repeat of the policy of lockdown, the single biggest transgression of our freedoms and our liberty ever suffered during peacetime, a policy that has damaged more lives than any other possible reaction to Covid.

And this is presented as a benefit.

Sometimes, Ripple gets it very, very wrong.