Ripple; Part 2: Ripple dominates Asia, will the US answer the call?
Covered in Part 1, it’s clear that the Ripple network has little to nothing to do with what makes cryptocurrencies valuable. And yet, Asia has quickly adopted the Ripple network as an excuse to run away from Western clearinghouses, as well as shield their questionable activity. Despite the jump away from the West, in no way does this mean that the US, and any country intimately tied to it, are going to escape the “ripple” effects from Asia’s splash into blockchain use with the Ripple network.
Someone in the crypto-sphere once described Ripple as the Trojan horse for banks to access the crypto-legitimacy.
Because any activity that is morally conspicuous won’t be overt, the rest of the world will be dealing with the seemingly legal activity changes from Asia. With Asia’s elimination of most clearinghouse use, it will be possible for them to run banking activity not just for themselves, but for others as well. There will be a mix of third world banks, NGOs, MSBs, and exchanges looking to piggyback on the “new found legitimacy” of closer to cost-free & instant settlements on the Ripple network by established banks in Asia.
The US will find itself in some stiff competition once business starts flowing to Asia. Ties with developing third world countries will weaken, or be broken as it becomes senseless to lose high profit margins from the low compensation they receive; for products that get marked up hundreds of percents later. Business in Asia will be offering more competitive prices; which have already out-competed most of the world in many fields. New businesses outside of the manufacturing industry will be looking to launch in Asian countries. Asia is standing to become a dominating force in the world, not just with industry, as general capital will seek Asia’s lax systems.
If Asia can process it all, and it looks legit, who would voluntarily use a Western clearinghouse?
The speed and lack of clearinghouses will be pinnacle factors in competition, on top of the money savings. Since the clearinghouses will be primarily out of the way, there really is nothing to stop 24/7 business that can now be conducted instantly. Business at the exchanges won’t have any reason to shut down and wait for clearinghouses to validate everything that happened during the trading day. Instead they can have instant movement of value with a cryptocurrency used by the exchange, and switch back to fiat and the Ripple system once they exit the exchange instantly. All the Western systems will be out competed, as anyone that can switch to Asian markets and Asian banking won’t hesitate to remain competitive.
No one will choose services that force them to wait weeks, days, or even just overnight.
The current “answers” to this emerging competitive market by the US are to tax cryptos inappropriately, burden them with archaic SEC regulations, prosecute people for non-applicable money-transmission laws, and, in general, send everyone involved running and screaming to crypto-friendly countries. The tax is senseless because it’s out of the purview of the state and makes all utility function for things like tracking products, insurance, etc, too costly (out-competed). The SEC regulations eliminate new emerging FinTech, new models of investment, and ignore the fact that we are no longer in the 1930s - before the information age. At this rate of total non-understanding, the US is going to see businesses and even citizens fleeing to countries that don’t want to be last in the world to adopt competitive technology for money system.
As an example of the current US approach, look at money transmission laws which primarily exist to prevent double spending — which does not exist on a decentralized cryptocurrency — being used to fine, prosecute, and force crypto-businesses out of the country.
But none of this has happened yet. There’s still time for the US to change how it wants to use & accept cryptocurrencies. It has a chance to out-compete Asian countries by rejecting Ripple’s false security, and offering truly secure solutions by adopting actual cryptocurrencies and value associated crypto-utilities — that are backed by incentive based networks. Sadly at this time, it’s rushing to regulate, not compete. Few lobbyists (if any) really exist for cryptocurrencies. I am doing my best to speak with whomever I can about cryptocurrencies & crypto-utilties, as well as the emerging emergency in the US’s non-competitive stance. Please, if you’re vested in crypto’s future, consider supporting my ability to lobby as it is expensive to travel.