President Trump has been quite vocal in his criticism of the Federal Reserve. His latest criticism to the fed came yesterday when he labeled this institution his biggest threat. That’s because it is raising rates too fast, hence strengthening the dollar, against other world currencies. This comes at a time when China, America’s biggest economic competitor is devaluing its currency, hence putting the U.S at a disadvantage in global trade.
All these issues are only hurting the global economy, and currency is part of the problem. It is increasingly becoming clear that the world needs a new financial system, one that fully takes care of the needs of a highly interconnected world, without hurting the interests of individual countries.
Such a system would have to be fast enough to allow for quick value transfer all across the world, without the need for foreign exchange reserves, and the need to trust individual nations to act in good faith with regards to their currencies. While it may seem like a far-fetched idea, XRP (XRP) could be the solution that the world economy is looking for.
One thing that gives XRP an edge as a possible solution to the issues facing the world at the world at the moment is its technical capabilities. XRP is fast, secure and has proven to be a reliable tool for cross-border settlements by financial institutions. This makes it quite a viable alternative to fiat currencies in international trade since all settlements can easily be done in XRP without the need for forex reserves, as is the case today. Therefore, if XRP were to be adopted as the standard of payments in international trade, most of the issues faced today, such as currency manipulation would be a thing of the past. Global trade would be fair and rewarding to everyone. It would usher in a new age of stability.
But why would the rest of the world use a currency that is heavily affiliated with an American company? Would a country like China, for instance, use it? Well, while ripple does hold a huge amount of XRP, the XRP ledger is completely decentralized. Neither ripple nor any other entity can single-handedly manipulate XRP. This eliminates the fears of its control being in the hands of a single country.
As a matter of fact, when it comes to decentralization, XRP is one of the most decentralized cryptos. On top of that, the U.S is still the dominant world power. As such, if the U.S were to shift to XRP as a standard of payment, a good segment of the world would follow suit. Simply put, the rest of the world would most likely get on board, out of the influence of the U.S in the global economy.
With the direction that the world is taking, it is clear that such a reset from fiat to a decentralized system like XRP is not far-fetched. As things stand, the global stock markets are feeling the effects of geopolitical uncertainty. If a recession were to hit at this point, with the high levels of sovereign debt in the system, the only way to salvage the economy would be a reset, and as discussed above, XRP would have a significant role to play in a new world financial order. These are interesting times for crypto, and for XRP in particular.