XRP built for practical use case to solve inefficiencies in legacy banking systems, says Ripple exec

“We do not see crypto as replacing fiat.” Breanne Madigan, Head of Global Institutional Market at Ripple said at The OECD Global Blockchain Policy Forum 2019. In the finance session, Madigan stated that Ripple was inclined toward interoperability and that “replacing fiat” was not their goal.

The Ripple exec said,

“We see opportunities for the two to co-exist and we see significant benefits in building networks of networks. We think about using digital assets as a great opportunity to solve the significant problem of trapped capital and pre-funding in the traditional correspondent banking system which is extremely inefficient with the set of Nostro and Vostro accounts, we estimate that up to 10 trillion dollars of trapped capital are being sued very inefficiently as a result of this legacy system that we are currently moving money with.”

Ripple views cross-border payments as the most “practical use case for digital assets” and added that XRP being hybrid between a utility and settlement token, was specifically built for the payments use case.

Madigan went on to address Ripple’s involvement in XRP and tried to disambiguate the “misinformation” that plagued the ecosystem.

“Ripple did not create XRP, nor do we control it. If Ripple went away tomorrow, XRP would continue to exist as with our ledger. There are currently 150 nodes on our ledger and Ripple controls operate only a seven of those.”

Institutional adoption

Madigan said that Bakkt going live with its long-awaited Bitcoin Futures to institutional clients was an important step for the overall crypto ecosystem. According to the Head of Global Institutional Market, liquidity is an important factor for institutional adoption. She went on to say that liquidity is one of the significant hurdles of institutional adoption of crypto-assets.

Madigan also emphasized that the development of derivative, deeper liquid markets, and hedging instruments was a very important strategical step toward institutional adoption.

Facebook’s Libra

In the panel discussion, Ripple exec echoed a similar sentiment to that of CEO Brad Garlinghouse while addressing Facebook’s upcoming Libra project. Madigan admitted that while the community’s reaction to Libra has been “polarizing”, she said that one of the best outcomes from its whitepaper was the fact that it “forced the regulators to come to the table to develop a framework”.

“I think developing a constructive global, regulatory framework for crypto-assets and investing in one of the most significant hurdles to institutional adoption.”