Hey guys, I am just trying to get my head around something. Is this at all correct?
I have heard that SWIFT sends $5 Trillion worth of money transfers PER DAY and that the banks and financial institutions actually have about $27 Trillion locked away in accounts in order to facilitate these money transactions; to be able to have the money there in order to send it. I hold my hands up that these are just things I have heard and I am not sure about the figures - a lot of you guys out there are more knowledgeable than me and can either confirm these amounts or not.
In order to get my head around this I am going to assume for a moment that XRP is a success with banks and gets mass adopted by them to settle payments worldwide. Just play along for a moment and assume this.
If there are $27 Trillion sitting in accounts to facilitate payments, and they suddenly start using XRP then I am guessing the whole value of XRP that they will need to hold is going to have to be at least 27 Trillion? if there are only 100Billion XRP units well a figure of $3 per XRP is not going to be enough is it? So banks are going to have to purchase and HOLD massive amounts of XRP in order to have them available to use to make money transfers, and therefore the circulating supply basically will be shrunk right down for investors like you and me. In turn this in itself will mean a price increase due to low supply and possibly more demand (good thing for banks as the value of XRP they hold will go up and they will hold the $27Trillion total that they require, and also if they buy them sooner rather than later it will cost than the $27Trillion that they are locking away right now, making it possible to use some of this money - I am just thinking out loud, I may be wrong).
So in effect 27 Trillion/100 Billion = $270. XRP standing at a value of $270 per XRP is what it would take to cover the value of the USD$ currently being held by banks in accounts to facilitate these cross border payments or money transfers. And this is IF the banks hold ALL the XRP that will ever exist. So am I correct in assuming then that if XRP is adopted fully by banks that the price of XRP could in theory climb to at least $270 per XRP.?
This is without any use by other big worldwide-known companies which may start accepting XRP as payment etc. Obviously this may bring up the question of "well if banks use/hold all or most of the XRP how will there be enough left for other businesses to make use of and accept as payments?". The only answer from the top of my head is that the per XRP price actually far exceeds $270 and banks will not need to have so much of it to cover the $270 Trillion needed. For example if we double the $270 to $540 then the banks would only need half of the total supply of XRP for their own purpose and the remaining 50 Billion XRP units could be free to be used in other ways, e.g investor purchases and acceptance by big companies as payments.
As I said I may be wrong here and I am not at all giving investment advice, but if I am wrong I would love to hear why exactly.