Answer: Bank's and XRP

[bearwoot]

Hi Bob,

Following your exchange on Twitter, here are the questions :). Thanks!

 When Brad is saying banks won't adopt a coin from Bank A because it's competitor, I believe the same issue exists for Ripple. If Banks adopt XRP and make it a global bridge currency, given how much XRP Ripple owns, it could make of Ripple a threat to them. What do you think of this issue ?

- I know people working in big banks that told me the nostro/vostros business was a revenue source for some of them. What do you think ?

- This has been said before , Ripple's XRP stash is key to help build XRP as a a bridging asset, nevertheless, at one point, distribution would have to be more diverse, how could this be achieved , and in what timeframe (i.e how would XRP be distributed worldwide) ?

- I'm really confident in Ripple vision but I've noticed Brad overhyping stuff this year ( " the 3 biggest payment providers company using XRP in 2018"), and announcing big future ( a bank using XRP in 2018, and dozens in 2019). What do you think of this ?

- Lastly, there is a bit of a chicken and egg question with xRapid : liquidity is required to operate xRapid, but xRapid is supposed to generate some ( and maybe push the price by doing that). How would that happen, what's the " tipping point", according to you  ?

I hope my questions aren't too skeptical and well formulated, english is not my native language so I did my best.

Thanks again,

[BobWay]

Wow, that is a lot of questions that ask me what I think.

I think I'm planning to discuss these topics in depth with Brad Kimes tomorrow morning. (9:00 am CDT) (UTC -5)

https://www.youtube.com/user/bradboomboom

2 hours ago, bearwoot said:

 When Brad is saying banks won't adopt a coin from Bank A because it's competitor, I believe the same issue exists for Ripple. If Banks adopt XRP and make it a global bridge currency, given how much XRP Ripple owns, it could make of Ripple a threat to them. What do you think of this issue ?

Brad is right, but it takes a deeper understanding of banking to know why. JP Morgan competes with other USD clearing banks like BNY Mellon and BAML. It is those banks that are competing. Ripple isn't a bank and doesn't do anything banking like. 

2 hours ago, bearwoot said:

- I know people working in big banks that told me the nostro/vostros business was a revenue source for some of them. What do you think ?

Corresponding banking (as discussed above) is a revenue source for banks. But if one bank is generating revenue, the other bank is the one paying those fees.

2 hours ago, bearwoot said:

 - This has been said before , Ripple's XRP stash is key to help build XRP as a a bridging asset, nevertheless, at one point, distribution would have to be more diverse, how could this be achieved , and in what timeframe (i.e how would XRP be distributed worldwide) ?

This is discussed in-depth in this thread. But you are going to have to read all the way through to understand. My view of the process is different than your question seems to presuppose.

 

2 hours ago, bearwoot said:

- I'm really confident in Ripple vision but I've noticed Brad overhyping stuff this year ( " the 3 biggest payment providers company using XRP in 2018"), and announcing big future ( a bank using XRP in 2018, and dozens in 2019). What do you think of this ?

I have a lot of trust in Brad G. He is a straight shooter and doesn't seem to announce anything unless the RippleNet customer/partner is willing to talk about it as well. But, all production deployments are the responsibility of the partner.

2 hours ago, bearwoot said:

- Lastly, there is a bit of a chicken and egg question with xRapid : liquidity is required to operate xRapid, but xRapid is supposed to generate some ( and maybe push the price by doing that). How would that happen, what's the " tipping point", according to you  ?

xRapid payments attract liquidity. It can happen in reverse if cheap liquidity is already available. But in both cases as payment volume increases more liquidity is attracted. That is because market makers bringing the liquidity are profiting nicely for doing so. Profits tend to increase with payment volume.

These profits are independent of price speculation profits.

The patent thread above gives lots of details about the tipping point. I'm sure Brad will want to talk about that tomorrow as well.

2 hours ago, bearwoot said:

I hope my questions aren't too skeptical and well formulated, english is not my native language so I did my best.

Thank you (original poster) for speaking English. I apologize for not knowing any other languages.

Edited April 24, 2019 by BobWay

[rippCurrent]

thank you for replying @BobWay,  i think with the question about hyping he was referring to these 2 statements made last year. Well, one from ripple 1 from brad

 

 

 

Edited April 24, 2019 by rippCurrent

[Guest]

2 hours ago, rippCurrent said:

 

thank you for replying @BobWay,  i think with the question about hyping he was referring to these 2 statements made last year. Well, one from ripple 1 from brad

 

You must understand that things get delayed especially in large enterprises. Have you ever tried getting a project into production? As a software developer, unexpected things always come up that may push your launch date (better to push back then rush to production with a broken product). 

I understand you’d like a CEO to be a little more accurate with his “predictions”, but look at the scale of what Ripple is accomplishing and these delays start to make sense. When you’re upending an age old infrastructure, it’s going to take time and you’re going to hit speed bumps (liquidity, regulation). Have patience (easy to say now), I truly believe what Ripple has accomplished/is accomplishing will one day be looked at as revolutionary on a global scale. And then factor in the other companies (Coil, Xpring, Polysign, XRPTipBot etc) building on the XRPL...

HODL on XRP is in great hands  

 

[BobWay]

3 hours ago, rippCurrent said:

thank you for replying @BobWay,  i think with the question about hyping he was referring to these 2 statements made last year. Well, one from ripple 1 from brad

The bottom statement seemed to happen first in time. That was January 2018 when crypto was booming. It was hard not to be excited at that moment. Brad's reply reads as a mostly personal snarky tweet responding directly to Nathaniel Popper throwing shade. I can tell you, at that moment EVERYBODY was interested!

The second one doesn't seem like hyping either. Just continued confidence in the way things are building out. When being asked about the earlier comment. 

[BobWay]

7 minutes ago, Ryyy20 said:

HODL on XRP is in great hands

Just to be clear, I have great respect for Brad as a leader and also complete confidence in the direction he has steered Ripple. If I didn't I wouldn't be holding XRP nor here talking to all of you.

However, Brad and I don't have the super close friendship I feel for Stefan, David, Arthur, Nik, Rome and many other Ripplers. I'll defend my friends to my dying breath. But expect me to give Brad some **** if I ever think he makes a bone headed move. After all, he still is "the new guy" to me. 

That said, let's be a little realistic when we analyze what happened in 2018.

• Through January while XRP was up 1,000 times in six months, everyone in banking thought they might get promoted for recommending their bank jump on the XRP bandwagon.
• Later in the year, with cryptocurrency down dramatically, those same people were likely wondering if they would be fired for suggesting they push forward with cryptocurrency.

After all banks pride themselves on stability. Going "all in" on volatile assets is not how most banks want to be publicly perceived.

But here in 2019,

• Small banks are still being overcharged by big banks for the international payment services they need to provide their customers.
• Remittance companies still have liquidity problems and trouble getting banked.
• Customers are still having payments go missing, even after paying exorbitant amounts.

The problems are still real. RippleNet and xRapid's solutions still solve them.

What I expect to see is:

• Smaller banks and payment services companies moving the fastest towards XRP as a new liquidity alternative.
  • People at those banks get promoted for creating better and cheaper services for bank customers.
• Larger banks favoring RippleNet's end-to-end payment synchronization solutions.
  • Nobody ever gets fired for improving internal efficiency, reliability and compliance of traditional products. 

 That's my bet on the next steps toward money's future. 

[rippCurrent]

Thanks @BobWay,  just to be clear I was referring to statement by ripple of 3 of 5 largest payment providers and brad saying a bank 100%.  and yeah sorry I put the posts in wrong order of timing but thank you for that response and it definitely makes sense with the 3 of 5 statement by ripple not coming to fruition since that was in jan when we crypto was booming, however, the vid I posted where brad says 100 percent a bank will use this year was in late june when we were around 45-50 cents so thats a bit different... anyways, so glad you r here in the community.. hope u dont think im being too skeptical, after all u asked for it lol, I just thought it was odd since he would have known at that point, late june, regulatory issues could get in the way so no reason to say 100 percent IMO.

[BobWay]

27 minutes ago, rippCurrent said:

hope u dont think im being too skeptical, after all u asked for it lol

Always be skeptical!

Yeah, I don't like it when people say 100%.  It's really hard when people are watching you so closely though.

Had he backed off that point, the whole story would have been, "Brad G NO LONGER BELIEVES blah blah blah..."  doesn't really matter what the rest of the story would say, nobody would read past the beginning before they started tweeting.

OK, so I guess I'm cutting him a bit of slack because I like him. But I also can't think of what I could have said better in that circumstance.

I don't really think the failure was a regulatory issue. I think it was much more likely what I wrote above. Someone said, "How exposed am I for moving forward with XRP if the price falls by half or more again." Which of course it did. Why take that risk, when you can continue forward with the safer RippleNet ILP strategy. Then wait and see what happens with XRP.  Everyone wants to be second. 

 

[rippCurrent]

33 minutes ago, BobWay said:

I don't really think the failure was a regulatory issue. I think it was much more likely what I wrote above. Someone said, "How exposed am I for moving forward with XRP if the price falls by half or more again

 I think many in the community are under the impression progress with xRapid is being hindered by regulation and from this post and previous posts in the regulation thread it seems as though that is not the biggest factor here..  hope you have a good night!! Thanks again Bob 

[rippCurrent]

11 hours ago, BobWay said:

I don't really think the failure was a regulatory issue. I think it was much more likely what I wrote above. Someone said, "How exposed am I for moving forward with XRP if the price falls by half or more again."

Do you think this is because they didn't fully grasp the concept that even with those price fluctuations, there is relatively 0 volatility risk through xRapid because they arent exposed for longer than 5 seconds?  Now, obviously if they plan to hold xrp, "holy grail"- Dilip Rao,  then that would be understandable.  So let me ask you one more question if you don't mind. 

Now that banks saw xrp drop like a ton of bricks since jan, what would be the moment they ARE interested in holding xrp.  I just find it hard to believe xrp will be 'stable' for at least 5-10 years, so even when crypto starts booming again, wouldn't there still be the same fear from the people at the banks that it could drop 70, 80, 90 percent at any given time?

Edited April 25, 2019 by rippCurrent

[BobWay]

2 hours ago, rippCurrent said:

Do you think this is because they didn't fully grasp the concept that even with those price fluctuations, there is relatively 0 volatility risk through xRapid because they arent exposed for longer than 5 seconds?  Now, obviously if they plan to hold xrp, "holy grail"- Dilip Rao,  then that would be understandable.

Really I was more referring to public perception rather than any particular operational characteristic. The early banks using XRP are going to want to announce that to the world so they can be seen as a thought leader. When they do, they want to media and public to react positively to that press release.

The don't want to see headlines like, "Bank X adopts risky volatile cryptocurrency in their payment flows..." Then it becomes their responsibility to react and explain a bunch of wonky details their banking customers shouldn't need to care about. Those customers just want cheap payments.

For this reason (only speculation) there might be a bank testing or using xRapid for some payment corridors. They just see no need to announce that publicly. Again, that is completely idle speculation on my part. The point I'm trying to make is that motivations are not always what people outside the business space anticipate they are.

2 hours ago, rippCurrent said:

Now that banks saw xrp drop like a ton of bricks since jan, what would be the moment they ARE interested in holding xrp.  I just find it hard to believe xrp will be 'stable' for at least 5-10 years, so even when crypto starts booming again, wouldn't there still be the same fear from the people at the banks that it could drop 70, 80, 90 percent at any given time?

Yeah, allow use of vs hold XRP is always a tricky concept to explain.

The reason for banks to hold XRP is the same as for anyone else. It really is a "flat" world in that regard.

1. Hodl, speculating that the price is going to go up over time.
2. Use that XRP to generate value now.
   1. perhaps market making for others to generate new revenue
   2. perhaps settling directly in XRP to reduce expenses (cutting out other market makers)
3. But banks have additional customer related options: 
   1. Hold XRP for customers because they demand that service
   2. Sell/Buy XRP to/from customers because they demand that service

When you see one or more of those options become attractive to banks, expect them to start acquiring XRP.

Before that, as I posted above, I expect smaller banks an payment services to move toward xRapid. That lets them get the cost benefits of XRP paths without any currency risk.

[Wrutherfoord]

On 4/24/2019 at 9:41 PM, BobWay said:

..here in 2019,

• Small banks are still being overcharged by big banks for the international payment services they need to provide their customers.
• Remittance companies still have liquidity problems and trouble getting banked.
• Customers are still having payments go missing, even after paying exorbitant amounts.

The problems are still real. RippleNet and xRapid's solutions still solve them.

What I expect to see is:

• Smaller banks and payment services companies moving the fastest towards XRP as a new liquidity alternative.
  • People at those banks get promoted for creating better and cheaper services for bank customers.
• Larger banks favoring RippleNet's end-to-end payment synchronization solutions.
  • Nobody ever gets fired for improving internal efficiency, reliability and compliance of traditional products. 

 That's my bet on the next steps toward money's future. 

Bob, thanks very much for your time and the insight provided in this week's interview with Brad Kimes, especially on the subject of growing XRP value as a bridge currency through increased utility and liquidity, focusing on exotic corridors, allowing MMs to make more money, and most of all, lowering the cost to users.  I have a few follow-up questions:

1) In your interview and on your "About the patent" thread you speak about the most practical path for XRP adoption being a gradual and somewhat predictable upward slope due to the factors I mention above.  Without having a crystal ball, when do you suppose XRP holders might see the price begin to follow such a path (with expected ups and downs along the way)?  Before the end of 2019?  As it stands now we've basically been stuck around $0.30 for over nine months, except for several spikes. We hear of Ripple signing new customers, opening new corridors, joining new exchanges and adding new market makers, but the demand is obviously still lagging despite significant cost benefits for users. If lack of regulatory clarity isn't impeding usage then what is?

2) When you write that 2019 will see "smaller banks moving the fastest towards XRP," are you also referring to the many smaller banks here in the US that now have to route remittance payments through the JP Morgans of the world?  My impression has been that practically no US banks are willing to use XRP because of perceived regulatory issues.

3) When do you think the larger banks using RippleNet will take the next step (their 2nd or 3rd priority) and start using XRP for exotic corridors?  Are regulatory issues more important to these customers?

Thanks

Edited April 27, 2019 by Wrutherfoord

[BobWay]

1 hour ago, Wrutherfoord said:

when do you suppose XRP holders might see the price begin to follow such a path

Price up to now has been completely consumer driven as far as I can tell. I don’t know when that will change. I really don’t have any more specific information than you do. I just have a different background in which to interpret the news and press releases that I read.

I’m simply teaching people the background information I have. I hope that will help you and others better interpret new information and reach your own conclusions.

1 hour ago, Wrutherfoord said:

My impression has been that practically no US banks are willing to use XRP because of perceived regulatory issues.

There are many reasons banks are unwilling to do something new and weird at the beginning. Singling out regulatory issues in the abstract isn’t particularly helpful go anyone’s understanding. This is because there is no moment in time when “regulatory issues” become settled.

Banks will use new systems and technology when two things are clear:

1. They are going to make more money, or avoid losing business to others
2. They are sure they are personally complying will all their necessary regulations.

Ripple’s job is to help them reach those conclusions.

1 hour ago, Wrutherfoord said:

When do you think the larger banks using RippleNet will take the next step (their 2nd or 3rd priority) and start using XRP for exotic corridors?

After they start losing business to others doing so. The same rules apply.