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slinuxuzer

Japan FTW - Forex

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I worked in FX for a few years and while I strongly hope your theory is correct that's a high value corridor. XRP seems positioned for low value, high volume in the near term before vice versa. 

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6 minutes ago, 7Bs said:

I worked in FX for a few years and while I strongly hope your theory is correct that's a high value corridor. XRP seems positioned for low value, high volume in the near term before vice versa. 

The Ripple team has stated publicly that they will start by targeting "inefficient" corridors, that could mean many things, but I have no trouble believing that a large corridor can be inefficient, you would really need to have intimate knowledge of JPY/USD to know for sure, but I'll say this, even the slightest inefficiency in something that big translates to big $ savings. xRapid is commonly touted as being able to save 40-60% transaction costs, in a 1 trillion dollar corridor,  I believe a very compelling case could be there. The settlement time alone is probably enough to institute a change.

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i doubt youll get much efficiency gains between an already highly liquid pair like USDJPY

the efficiency is gained through extending REACH into new markets without having excess foreign accounts

as trading/forex hubs, these big capital cities can use their expertise to extend into new markets

ALSO... japan wants to leapfrog their domestic settlement system anyway as it's HORRIBLY out of date, so they're retrofitting = opportunity for RippleNet

and finally, as you say, it's a good place to target because you get just a few major banks in japan and you have captured most of the market

EDIT: also, japan is a big commercial and political ally of "the west" and work in tandem in some ways

Edited by zerpdigger

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There will be a price move even if they capture only low value, high volume. This strategy might stabilize 'perception' of volatility first, whether that perception is overly paranoid or not, which otherwise would dissuade a high value FX mover. High value corridors are moving hundreds of millions-billions per transaction. If there's any hesitation, whatsoever, that high value mover would break up the transaction into pieces to lower risk before pressing send. This is key to how quickly it all transitions from low value, high volume to high value, low volume to finally high value, high volume.

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9 minutes ago, zerpdigger said:

i doubt youll get much efficiency gains between an already highly liquid pair like USDJPY

the efficiency is gained through extending REACH into new markets without having excess foreign accounts

as trading/forex hubs, these big capital cities can use their expertise to extend into new markets

ALSO... japan wants to leapfrog their domestic settlement system anywat as it's HORRIBLY out of date, so they're retrofitting = opportunity for RippleNet

and finally, as you say, it's a good place to target because you get just a few major banks in japan and you have captured most of the market

I agree the liquidity is there, but as Brad G. stated, their domestic rails are horrible and are being replaced with RippleNET, I could see this fact alone as having been a cause for inefficiency in the corridor.

 Do you not see a business case in reducing settlement time? Reducing or eliminating the need to move physical currency / stock physical currency? Surely there are loads of fees baked into those middle men and legacy processes? Just because something works smoothly and predictably doesn't make it efficient, particularly in the face of Next-Gen technology. BlockBuster worked yea?

Edited by slinuxuzer

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I don’t think it was Ripple’s strategy or aim, they have been clear on that. Yet as it involves payments / settlement as well and Japan is reorganising their domestic payment rails based on Ripple tech as well, I do think that SBI has a broader strategy including FX markets. Indeed there is some big potential there as well.

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5 minutes ago, 7Bs said:

There will be a price move even if they capture only low value, high volume. This strategy might stabilize 'perception' of volatility first, whether that perception is overly paranoid or not, which otherwise would dissuade a high value FX mover. High value corridors are moving hundreds of millions-billions per transaction. If there's any hesitation, whatsoever, that high value mover would break up the transaction into pieces to lower risk before pressing send. This is key to how quickly it all transitions from low value, high volume to high value, low volume to finally high value, high volume.

If you look deeply at SBI Groups FX business, they offer the cheapest and fastest service in FX, they admit they came late to the FX game, actually says that in their reports, but they have been experiencing rapid growth because of their competitive service offering, xRapid could easily make it much more competitive. Surely there can be 1-3% of the corridor sourced from the other 49 FX players in Japan that want to go around the primes and offer a cheaper / faster service to fuel their growth model?

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3 minutes ago, slinuxuzer said:

 Do you not see a business case in reducing settlement time? Reducing or eliminated the need to move physical currency / stock physical currency? Surely there are loads of fees baked into those middle men and legacy processes? Just because something works smoothly and predictably doesn't make it efficient, particularly in the face of Next-Gen technology. BlockBuster worked yea?

well i guess the analogy is something like towards the end when blockbuster tried going digital, at first with video CDs and CDs then DVDs and whatnot... ultimately a biz built from scratch for the digital age is just going to win -- EVEN IF blockbuster had made the transition they'd have slipped way down the ladder

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I have been always saying that a real tipping point from my perspective would be is a single reasonably big FX broker making XRP its settlement vehicle. There is an enormous potential and many (if not all) brokers would be forced to follow which would lead to the exponential growth. Could GMO or DMM be the first given them setting up crypto exchanges? Could be. I have personnaly been betting on NEX. Time will tell.

Great theory, @slinuxuzer. Slightly over-optimistic but you know how Japanese are. You never know what’s on their mind..

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11 minutes ago, slinuxuzer said:

If you look deeply at SBI Groups FX business, they offer the cheapest and fastest service in FX, they admit they came late to the FX game, actually says that in their reports, but they have been experiencing rapid growth because of their competitive service offering, xRapid could easily make it much more competitive. Surely there can be 1-3% of the corridor sourced from the other 49 FX players in Japan that want to go around the primes and offer a cheaper / faster service to fuel their growth model?

Either way you slice it, it's the same pie - direct total JPY corridor liquidity entry (banks) vs. indirect total JPY entry (FX brokers). Just has to do with expediency for XRP accepted as a true bridge currency. Then the real fun starts, with XRP as a bridge asset, not just FX or cross border but in ILP IOV transactions, bridging tokenization transactions, where every asset is tokenized, in a tokenized economy. What do you think @Hodor ?

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