Ripple CEO Brad Garlinghouse Says XRP will beat any bank-backed cryptocurrency.
According to Ripple CEO Brad Garlinghouse, bank-backed digital assets are an unrealistic and “deeply misguided” solution for the industry. When the Utility Settlement Coin was announced, Ripple CEO Brad Garlinghouse penned an op-ed called “The Case Against BankCoin”, outlining why he believes bank-backed cryptocurrencies are doomed to fail. “A bank-issued digital asset can only really efficiently settle between the banks who issued it. Then, two scenarios can play out. Scenario one: all banks around the world put aside competitive and geopolitical differences, adopt the same digital asset, agree on its rules, and harmoniously govern its usage. Fat chance. Scenario two (the more likely scenario): banks not in the issuing group issue their own digital assets with their own sets of rules and governance.
The result would be an even more fragmented currency landscape than what we have today. If banks of different digital asset groups want to settle trades with one another, they’ll have to make markets between their unique digital assets or trade between their digital assets and a common fiat currency. What a mess!
The second big problem with the ‘utility settlement coin’ is it seems it’ll be backed by a basket of currencies. Once backed by cash, it’s no longer an asset; it’s a liability. Trading liabilities then ultimately requires moving cash across borders, re-creating today’s system but adding more friction!” “We strongly believe banks need an independent digital asset to enable truly efficient settlement and we believe XRP is best positioned for that role.
Do you agree with Garlinghouse on the purpose behind ban-issued crypto?
Let us know in a few words!