Does XRP fit into the ECB’s vision?

September 5, 2020 Editor Ripple 0

  • A retweet of a tweet from the head of the EU Central Bank by Ripple CEO Brad Garlinghouse has caused a stir in the XRP community.
  • As a result, speculation arose that it might be a hint from Garlinghouse.

A recent retweet by Brad Garlinghouse of the head of the EU central bank, Christine Lagarde, has rekindled old rumours of a close relationship between Ripple and central banks around the world. Lagarde responded in a tweet on 2 September to a tweet from Ursula von der Leyen, head of the European Commission.

In the tweet, Lagarde explained that the two had recently exchanged views on the issues for Europe’s rapid recovery from the Corona pandemic and how to make the economies of European countries more resilient in the future. Lagarde made three demands in her tweet:

I enjoyed marking “la rentrée” with Ursula @vonderleyen and Commissioners. Here @ecb we see a twin challenge: shoring up our economies for the short-run and planning for the future economy. #NextGenerationEU provides a bridge between them.  Now we need:

– Faster digital transition
– Climate protection as a priority
– Completed banking union and capital markets union, backed by cutting-edge payment systems

The tweet caused a huge response in the XRP community, which suggested the RippleNet or XRP token as an ideal solution. All three of Lagarde’s demands are features of the RippleNet or XRP Ledger, which Ripple emphasizes over and over again. Thus, the XRP Ledger can perform transactions within seconds and is “green” unlike Bitcoin. In addition, the RippleNet has over 300 clients, including large banks and other payment service providers.

Lagarde’s tweet subsequently received the attention of Ripple CEO Brad Garlinghouse, who retweeted it without comment. As a result, speculation arose again that this might be a hint from Garlinghouse and that Ripple’s CEO might be informed about Lagarde’s potential plans.

Ripple’s relations with the IMF and central banks

The rumors surrounding Ripple’s relations with central banks around the world, and in particular with the International Monetary Fund (IMF), of which Lagarde was head until last November, are not new. Especially because Ripple is very active in the area of regulation and in the exchange with political decision makers, rumors that XRP might be part of a future plan of central banks have been circulating in the past.

Ripple’s relationship with the IMF in particular has caused a stir in the past. So it is no secret that the IMF and Ripple have been seen together on many occasions. The IMF was present at Swell, and both have also appeared together on stage at conferences and festivals. Remarkable, for example, was when Brad Garlinghouse and the former Deputy General Advisor of the IMF, Ross Leckow, stood alone on stage in Singapore in 2018.

In addition, the IMF has allegedly organized various meetings between Ripple and central banks. For example, Ripple hosted the “Central Banks Summit” in November 2017. As a publication at the time stated, Ripple hosted “the world’s central banks to explore the next generation of payments”. At a Swiss National Bank conference in May 2019, Brad Garlinghouse was the sole private sector representative sitting at the front table and presenting the technology of Ripple.

Also, noteworthy is a 2018 statement by Sagar Sarbhai of Ripple that the company works with 40-50 central banks. Nevertheless, it remains to be stated that although Ripple appears to be very well networked, there are no official statements about central banks, such as the European Union, testing RippleNet.

It is also questionable whether Ripple could even provide the necessary infrastructure. As Brad Garlinghouse recently revealed, the growth and adoption of On-Demand Liquidity (ODL) is currently being slowed down because it is not enough liquidity available.