Ripple, having endured prolonged legal difficulties, is proposed to become a key player in shaping the US financial strategy. The new proposal claims that integrating XRP could significantly boost the country's liquidity.
How XRP Could Free Up Trapped Funds
The proposal, written by Maximilian Staudinger, suggests using XRP to free up capital trapped in Nostro accounts, which are used for cross-border transactions. According to the document, these accounts hold about $27 trillion globally, with approximately $5 trillion belonging to US banks. By utilizing XRP, $1.5 trillion could be released and directed towards Bitcoin purchases. Staudinger also proposes a structured crypto reserve system where Bitcoin takes the central role, while Solana and Cardano could be used for government applications. However, the main focus is on XRP as the most critical asset for handling financial transactions.
Bold Bitcoin Claims Raise Questions
One of the more controversial parts of the proposal is the claim that the US could purchase 25 million Bitcoin at $60,000 each. This is impossible, as the total supply of Bitcoin is limited to 21 million. Still, the proposal argues that using XRP could save the US up to $7.5 billion annually in transaction fees and make government payments, such as social security and tax refunds, faster and cheaper.
Regulatory Challenges Stand in the Way
Despite its ambitious plan, the proposal faces a significant hurdle—the unclear regulatory status of XRP. Staudinger urges the SEC to classify XRP as a payment asset instead of a security. He also calls on the Department of Justice to lift restrictions preventing banks from using XRP. To expedite the process, he suggests a presidential executive order to bypass regulatory delays. His plan includes two scenarios: a standard 24-month rollout with regulatory approval, government payments, and bank adoption, or opting for a fast-track 6-12 month timeline using executive orders and Fed mandates for quick XRP integration.
While the idea is intriguing, independent proposals like this rarely gain traction without the backing of major financial institutions or government officials. Without substantial support, it remains a bold idea rather than a plan that the US is likely to adopt anytime soon.
