Today, the central banks of Australia and New Zealand made some interesting insights into blockchains and cryptocurrencies. While they are positive about cryptocurrencies, they hold the view that bitcoin is inefficient, and may not be ideal for their operations. They have also ruled out the possibility of rolling out their own cryptos. This leaves a very interesting possibility, and that’s the adoption of Ripple (XRP) by these two central banks. You can easily read this from the tone of the central banks of these two countries towards cryptos.
First, they have singled out bitcoin’s payments inefficiencies as the reason why they can’t adopt it. For a central bank, there are very few other cryptos that have the capacity to give operational efficiency better than Ripple (XRP). That’s because in its very nature, Ripple is designed to be a bankers coin. It is fast, has low transaction fees, and is very stable. These are attributes that make it the perfect crypto for bank-to-bank transactions such as those carried out by central banks.
Besides, a central bank would go for a crypto that has wide acceptance by banks all across the world. That’s because central banks engage with other banks across the world for macro-stability purposes. As such, they would have to go for a crypto that is widely accepted in the industry, and none beats Ripple (XRP) on this front. Ripple is currently working with more than 150 banks all across the world. This makes it easier for a central bank to adopt it and introduce it to local banks with ease.
The only other crypto that would rival Ripple (XRP) on this front is Stellar XLM. Like Ripple (XRP), Stellar too is focused on the banking industry, and has a number of partnerships with several central banks. It is also superfast and has some of the lowest transaction costs for the banking industry. The only reason why Ripple (XRP) has an edge over XLM is that it has a wider network. With more than 150 banks under its fold, Ripple is literally unrivalled.
As an investor, the best you can hope for is that these central banks adopt Ripple (XRP) as soon as possible. That’s because once this happens, Ripple’s intrinsic value will push up by a huge margin. It could also see other central banks follow suit given that the central bank of a country like Australia is an influential one, and its decisions have ramifications across the world. It wouldn’t hurt to stock up on some Stellar Lumens too, in case any of these two central banks adopt it.
Whichever coin they choose though, one thing is clear. Cryptocurrencies are growing in adoption, and the fact that banks are taking a bigger interest is a sign that blockchain technology is changing the world. In the next 5 years or so, cryptocurrencies will be so different from what they are today. They will have reshaped entire industries.
This information should not be interpreted as an endorsement of cryptocurrencies or a recommendation to invest. Historic performance is no guarantee of future returns. As an investment class, cryptocurrencies are speculative investments and investing in cryptocurrencies involves significant risks – they are highly volatile, vulnerable to hacking and capital loss and sensitive to secondary activity. Before investing you should obtain advice and decide whether the potential return outweighs the risks.