You Will Eat Zee Bugz & Uze Zee Ripple
The World Economic Forum is officially listing crypto firm Ripple as a partner. Let's unpack some of the potential implications.
In yesterday’s (admittedly long and chart-heavy) layout of the precarious debt position the United States government now finds itself in (as I see it, at least), I made a subtle comment about “The Great Reset” if you caught it:
We know what will happen if the Fed doesn’t pivot; debts by the public and private sector can’t be refinanced in a way that make them more serviceable. When that happens, everything collapses; stocks, bonds, and more importantly, the entire real economic system. Unless all of those results are intended (entirely possible), the more likely outcome seems to be an imminent Fed pivot.
The possibility that destroying everything in an attempt to rebuild the world from Klaus Schwab’s molding, while implausible to many, is entirely possible in my mind and it might actually be the most logical explanation for much of what we have seen over the last 3 years or so:
Virus enters the wild and shuts down the world
“Two weeks to slow the curve” turns into magic juice mandates
Weaponizing currency systems against both citizens and nation-states
These are not things you do if you’re trying to establish organic trust in a system. They’re things you do when those systems are breaking down and you’re losing control. To be clear, I’m NOT saying this was all on purpose and by design. But… strange conveniences seem to happen when we have societal calamities and the result on the other side is invariably less freedom for normal people.
Never let a crisis go to waist, amirite?
A New WEF Partner
This week, the World Economic Forum announced a new partner and it’s a fun one. You know the WEF, right? It’s the place filled with unelected do-gooders who push unpopular policies simply by penetrating zee cabinets.
The WEF is the entity that would have us owning nothing and happily eating cricket burgers while those in the aristocracy continue with beef because remember, rules for thee but not for me…
In any case, the WEF made some headlines in the crypto-sphere this week because of a new partnership that made it’s way to the WEF website. The World Economic Forum is officially a partner with Ripple (XRP):
Ripple is not a cryptocurrency that I have talked about a whole lot in Heretic Speculator but it’s one that I’ve known about for years, previously held, and been following at a distance. While it’s not a surprise that Ripple is seen as a payment solution for the WEF - the transaction speeds are ridiculously fast and borderless, I do think that this is a really interesting development given the backdrop of what Ripple is currently going through domestically. Namely, being sued by the SEC for selling XRP tokens:
In the eyes of the SEC, Ripple is so centralized as a business entity (it is) that the XRP token qualifies as an unregistered security. I’m not going to comment on the SEC’s position there because it’s beyond the scope of this article. But immediately following the SEC’s lawsuit with Ripple, most of the popular crypto exchanges stopped supporting XRP as an asset.
This partnership designation with the WEF is really interesting to me because even though Ripple is an American company with an American CEO and a headquarters in San Francisco, it’s not super easy for Americans to actually get XRP tokens. Coinbase doesn’t support XRP for US residents. Gemini doesn’t either. As I alluded, the token itself is an entirely different conversation. What’s important is the rails and who uses Ripple already.
A partnership between Ripple and the World Economic Forum comes as no surprise. In the international financial system, Ripple has made a name for itself thanks to its cutting-edge payment system. Many banks and other financial institutions have formed alliances with Ripple to use the technology for instantaneous cross-border payments because of this solution.
Stables on crypto rails
I haven’t spent a whole lot of time talking about Stablecoins on this blog, but they have become a critical component of the cryptocurrency ecosystem. USDC, a 1 for 1 dollar pegged stablecoin issued by Circle, now has a $52 billion “market cap.”
In this instance, it’s not so much a market cap as much as it is an “issuance” figure. This is real USD that has been put through a regulated company specifically for the purpose of on-chain crypto transactions. USDC now lives on Ethereum (ETH-USD), Solana (SOL-USD), and roughly a half dozen other base layer cryptocurrency blockchains.
Because of the nature of USDC’s centralized issuance, even though the USDC that had been put through crypto mixer Tornado Cash lives on the Ethereum network which Circle doesn’t control, Circle was still able to freeze the USDC tokens that had been moved through the protocol:
Ethereum blockchain explorer data shows that Centre has stopped the movement of at least 75,000 USDC by blacklisting Tornado Cash wallets on the sanctions list. Among these addresses is Tornado Cash’s USDC pool, meaning those with USDC deposited on Tornado Cash may be unable to withdraw their funds.
I shared this with my BlockChain Reaction subscribers after going a little bit deeper on Tornado Cash earlier this month. Tornado Cash, while a rather niche protocol in crypto, is a massive shot from the US Treasury and it’s very important to pay attention to how that story develops going forward in my view. Among other philosophical challenges, Tornado Cash reflects centralization vs decentralization undertones.
What does this have to do with Ripple?
Ripple is essentially competing with Circle in my view. While Circle isn’t picking a network rail winner and instead trying to integrate with many of them (smart, IMHO), Ripple is trying to be the network rail winner. Like these other cryptocurrency networks that house USDC, Ripple’s network can theoretically be used to move dollar peg derivatives as well. If successful, Ripple becomes an even more important component of global payments. And because it’s so centralized, the regulatory capture problem is self-evident.
Both Ripple and Circle are challengers to the SWIFT system. Again, SWIFT is the global payment system that has been used as a weapon against Russia for the Ukraine fiasco. But theoretically challenging SWIFT isn’t the only thing Ripple and Circle have in common…
Like I told my BCR subs earlier this month, USDC is now a de-facto CBDC. And look, I’m not going to sit here and give you reasons why you might consider divesting any USDC or XRP that you might be holding, that’s entirely up to you. XRP obviously has theoretical upside if you’re comfortable with betting on the continued financial enslavement of humanity (no judgements, I swear). I don’t personally have exposure to any of it at this point. I will tell you that if you’re going to go the divesting WEF partners route, just be careful about which alcoholic swill you decide to consume as well.
Wine is better anyway.
Disclosure: I’m not an investment advisor. I merely share what I do and why I do it. You shouldn’t take anything I say as investment advice and always do your own research when making investment decisions. Cryptocurrencies, tokens, STONKs, and digital trinkets could all go to zero. I have no job and I live in my wife’s basement. I’m the last person on the face of the earth who you should listen to for financial advice or life advice.