11th October 2022 > > Crypto adoption and XRP.

tl;dr

Crypto adoption and a minor XRP (Ripple) update.

Market Snap

Market Wrap

That’s 4% on the board. At the start of the year 10-year rates were a mere 150bps or so, meaning that long-dated bond portfolios are down 25% of notional this year alone. That’s what you call market turmoil. Value destruction of purportedly safe investments on a grand scale, thanks to the hubris of central bankers worldwide.

Curious Cryptos’ Commentary – Crypto adoption

It is sometimes difficult to get excited about cryptos during bouts of bear market action. Or at least I am told that happens to other people.

Anyways.

There is a load of stuff going on behind the scenes, stuff that will soon prove that cryptos, and the concept of decentralisation which is so alien to organisations like the IMF (International Monetary Fund) and some others I could mention, are going to play such an important role in creating prosperity, happiness, and fulfilment for humankind.

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Visa, long a staunch supporter of the crypto revolution, is launching debit cards across 40 countries, partnered with FTX, a centralised cryptocurrency exchange. I have never found the need to use FTX, and I cannot comment on it, but suffice to say, I believe it is one of the big boys.

A spokesman for Visa gets my vote:

“At Visa, we believe that digital currencies will have a lasting impact on the future of financial services and money movement.”

Backing up their words with action, the debit cards can be used to make payments using cryptos rather than fiat. Though the focus now is on Asia and Latin America, the spokesman explained the short-term ambitions of this initiative:

“The next phase of the rollout for the FTX-branded Visa debit cards is expected in Europe before the end of the year, with additional regional launches planned for 2023.”

Given the EU’s surprising and most welcome pivot towards appropriate and targeted regulation of cryptos – as demonstrated by the Markets in Capital Assets legislation previously discussed at some length in these daily missives - this ambition will surely be accomplished.

Visa CFO Vasant Prabhu had this to say:

“Even though values have come down there’s still steady interest in crypto.”

And he should know.

Curious Cryptos’ Commentary – Minor XRP (Ripple) update

For a long time, I have been of the view that supporters of XRP who claim that William Hinman, former SEC Director of Corporation Finance, is guilty of blatant corruption by the Ethereum Foundation whilst at the SEC are doing themselves no favours.

You will recall that Hinman declared both BTC and ETH to be commodities not securities, and that the SEC has accused Ripple Labs and its executives of breaching securities laws.

If XRP proponents do manage to successfully prove that Hinman is guilty of corruption, that increases the probability that ETH is declared a security, thereby guaranteeing without a shadow of a doubt that XRP is a security. That is the exact opposite outcome to what XRP enthusiasts want to see.

Finally, I have some support in the form of Cardano founder Charles Hoskinson, who responded to XRP attorney John Deaton with this comment:

“You’re a lawyer John and understand full well that the corruption discussion will have no impact on the current is XRP a security conversation. It’s a completely separate matter and should be treated as such. All it does is fragment the space and reduce the chance of winning.”

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For full disclosure I believe that we are approaching the endgame in this saga, and it seems increasingly likely that Ripple Labs will win. I have therefore made a small investment in XRP, but this is not investment advice, its disclosure.