Bitcoin - for some speculation and an inflated bubble, for others the gold of the future. The current value of Bitcoin of about 45,000 USD so far proves the second camp. As the number of retail cryptoinvestors grows during the current global cryptoboom, there is also a growing awareness of other crypto-symptoms. altcoins (alternative coins) resp. other cryptoactive assets. Ethereum , the current number two in the cryptocurrency market, is recharging the world through the so-called DeFi (decentralized financing) and NFT tokenization. The originally recessive cryptocurrency Dogecoin was once again made famous by Elon Musk on his tweeter account.

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There are currently about a few thousand cryptocurrencies and new ones are created every day, but only less than 1% have real technological use, and therefore it is not a so-called "Shitcoins" although Bitcoin rock fans claim that all cryptomens except Bitcoin are actually shitcoins. Most cryptocurrency developers as well as cryptocurrency fans emphasize their decentralization, which means that they are not regulated by one central institution (eg a central bank), but their future future and updates are decided by the community. Returning to the aforementioned one percent, one cryptocurrency from this exclusive club goes a little against the current. This is a cryptocene XRP from Ripple . We can easily consider XRP to be the black sheep of the cryptotrom, as its partners are, paradoxically, banks and state institutions, which is also the reason why fans of decentralization do not love it very much. However, XRP can be much more interesting than it may seem at first glance.

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Why would banks be interested in XRP? Technology…  Ripple has developed an extremely fast payment network that can make payments anywhere in the world in a matter of seconds, which is finally a 21st century blow compared to current cross-border bank payments. In addition, with very low transaction fees (0.0001 XRP per transaction). Another advantage is the negligible impact on the environment, as one XRP transaction consumes only about 0.00001133 kWh of electricity (for comparison Bitcoin about 118 kWh). We will not pay more attention to technical details, but the fact that large banks such as Santader, Bank of America and Standard Chartered Bank are already cooperating with Ripple is definitely worth noting. The Banque de France is also considering cooperation , and official Goldman Sachs documents are also mentioned in the XRP.

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The beginning of the dispute with the SEC

At this point, it's no longer nice with XRP. On December 22, 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple on the ground that in 2013 XRP sold $ 1.3 billion in unregistered securities without prior SEC approval. Added to this are accusations against Ripple CEO Brad Garlinghouse and Chris Larsen for manipulating the XRP market price.  Ripple argues that XRP was sold as a commodity as well as Bitcoin and Ethereum and is therefore not subject to the SEC's licensing obligation. The author will not forgive the fact that Jay Clayton - the then SEC chairman - was the last day of work on December 22, 2020. :)

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Implications for markets

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XRP was withdrawn from most of the largest crypto-exchanges, such as coinbase and its price has dropped significantly. However, after a series of successes in Ripple's Asian financial markets and a favorable lawsuit, the XRP price rose to annual highs in April. Following the arrival of the new SEC President Gary Gensler , a well-known cryptocurrency fan, many XRP fans expected the dispute to be settled through a settlement. However, this has not happened to date, so thousands of retail investors are still living in uncertainty as to whether they will be millionaires after the verdict or their investments will drop to zero. A positive ruling for Ripple would mean a judicial confirmation of the legal form of the XRP cryptocurrency (as the first cryptocurrency ever), which would have a significant positive effect on its market price, but if Ripple lost the dispute, the XRP would probably become a near-zero security .

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Why should we care?

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CBDC … central bank digital currency. The CBDC can easily be called the monetary reform of the century. Central banks around the world (Norway, Russia and others), inspired by success and cryptocurrency technology, have begun to develop their own digital currencies. China has even brought its digital yuan into a testing phase. The European Central Bank launched the Digital Euro Project in July 2021 and will explore its use over the next 2 years. How does this relate to XRP / Ripple? CPA Australia - one of the largest accounting firms in the world - published information that the French Central Bank has started to openly discuss the possibility of using XRP / Ripple as a platform for European CBDC. In a very similar vein, Goldman Sachs mentions XRP in its materials. XRP could therefore in the future play the role of so-called bridge currency , very simply a kind of intermediate stage in transfers e.g. digital euros and dollars. In terms of conspiracies, we could imagine that in maybe 10 years, when you send digital euros from your digital wallet to your cousin to the US, somewhere in the middle of a few seconds they will turn into XRP, and then XRP into digital dollars in your cousin's wallet. in New York. However, as the XRP continues to be further institutionalized in the future, it will largely depend on the outcome of the SEC litigation. It is not possible to create a global financial system without the involvement of the largest market in the world.

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Of course, XRP is not the only candidate for the CBDC platform. There are dozens of other ambitious projects that can really apply for this role, but XRP is definitely to be considered. It will therefore be interesting to see what impact it will have  The SEC vs. Ripple case on our (digital) wallets in the future. Alternatively, you can still hope that the whole cryptobubble will collapse.