If every bank creates their own token, you just reinvent the settlement problem.
If banks create tokens backed by fiat, then each token is tied to a jurisdiction and there's still a huge market in providing liquidity across jurisdictions. (This would be one possible way to improve domestic payments.)
If banks create unbacked tokens, then they have to incentivize all the liquidity themselves and we're way ahead of them with plenty of bank support. They'd have to raise and expend all the funds that we already have.
I have almost no doubt that all of these things will be tried and that some of them will be successful. Bitcoin could also gain significant market share as a settlement currency between inter-ledger exchanges locked in particular jurisdictions (the payment tech Ripple is cooperating to build will, I hope, be good for many cryptos). We think we can position XRP to compete on a level playing field.
You might also start to see more organic growth of XRP. XRP transactions are much faster, cheaper, and more reliable than transactions on any other major blockchain. And XRP has many features that other blockchains don't such as key rotation, native multisign, native support for arbitrary assets, order books, and cross-currency payments, and so on. It may not just be Ripple pursuing international payments for much longer.
Of course, there are no guarantees. These things also might not happen.
This is the money post and what it all boils down to in the end
Can banks go it alone and get the liquidity themselves to make their own ripple-like blockchain system work?
Or can XRP gain enough liquidity (through crypto markets etc) to make banks want to use it?
Its almost like a chicken and egg problem. It makes XRP somewhat dependant on liquidity from crypto investors...many of which don't want a centralised system...which is why crypto investors invest so heavily in tech's like bitcoin etc as it is
It seems your assuming that XRP has its own source of real liquidity beyond crypto investors too, perhaps getting banks to buy the XRP tokens.... But if the XRP tokens come at a high price, it incentives the banks to group together and make their own, cheaper system.
Another important thing: Could it be that the banks don't need to have a real liquidity amount in their ripple-like system to begin with? They could just make up an arbitrary token in cyber space, with no actual sellable value in dollars/fiat. And then fix that at certain rates to fiat..and then use that.
So, liquidity doesnt have to be an issue at all. Liquidity isnt required because the token for inter-bank payments can just be fixed to fiat amounts to keep things simple, and with no dollar re-sell value. Banks can just use a fake token and peg it to fiat and use that for inter-bank and cross-border transfers. Who says the token has to have any value? Your making a huge huge assumption there.....
It obviously saves the bank money if the token has NO value, instead of having to fork out and deal with a volatile token price on the open market
So....it seems like Ripple is trying to sell a concept to crypto investors that doesn't necessarily have to be the way for banks. Not to mention that crypto investors dont like centralised stuff. The nonsense that miners make things centralised is false. The open market determines the price of tokens and not the miners. Whereas by XRP keeping control of a huge chunk of the supply of XRP, they can manipulate the open market at will.
There has to be a clearer roadmap shown for the XRP concept that can convince crypto investors why a bank will want to use it. Because tokens (like XRP) for inter-bank payments dont need to have any value. You can just make the value up if the consortium of banks are in agreement.
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Last thing, as for banks using the quickest and easiest way, it would seem to me that the quickest and easiest way would be to bypass the liquidity issue altogether and peg cyber tokens (with no dollar value) to fiat. And then use that. Why does the cyber token need to have any money value whatsoever? Why does the XRP have to have any monetary value? It doesn't.
Banks can just as easily make their own tokens (with no dollar value) and peg that to fiat. Which is what groups like R3 could very easily do
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I wont deny that ripple has a great team and can get things done..and it has a proven track record and there's so many VC firms investing in it, that they clearly saw a lot of light in the idea.
And btw, just as full disclosure, I did make some money from XRP so I have made money out of it, but seems ripple doesn't have to be the $100bn+ market cap beast that people initially thought it would be. It can have a place in the market for sure, but there's still huge questions and uncertainty when questions like above are asked
So...clarity there would be super helpful
