Ripple vs. bitcoin: Federal Reserve picks ripple currency
The Federal Reserve gives ripple a thumbs up. In a video released by the St. Louis Fed, David Andolfatto dives into his beliefs about the future of bitcoin, ripple and other cryptocurrencies. The presentation gets interesting around 52 minutes when Andolfatto poses the following question:
“Does anyone use ripple?” he asks. “Wow, I think you guys might be the winners.”
That’s an impressive (if early) conclusion especially when you consider the fact that Andolfatto’s a vice president at the St. Louis Federal Reserve.
Ripple and the Federal Reserve
“Ripple will process U.S. dollars, euros, bitcoins, it’s native currency. … It’s currency agnostic,” he says. And he believes that’s what will allow the protocol to thrive alongside the Federal Reserve. The two systems, he says, could peacefully co-exist. Here’s a long excerpt I transcribed from the video:
We have this institution, the Fed, it’s withstood the test of time … and the U.S. dollar is still the king. It’s passed the market test for 100 years here. We have a politically independent Fed operating an elastic supply of currency – there’s some benefit to that if you can trust the institution to operate it – with a Congressionally-assigned mandate; for example, some notion of price-level stability. That’s basically what we have in this country. And arguably, it’s worked relatively well. Although of course, no payment system is perfect.
And then, what I can see co-existing alongside this institution is something like the ripple platform – that currency-agnostic peer-to-peer payment system I just described that facilitates low-cost payments. So potentially, consumers can bypass Western Union and $10 service fees. That’s going to be a thing of the past. I mean with Ripple, you’ll be able to send money anywhere in the world for very, very low cost. So that’s something that could come together. Kind of this marriage of (Janet Yellen and robots).
Then, comes the kicker (around 55 minutes): “(This technology) will force traditional institutions including central banks to either adapt or die.”
At least someone at the Fed recognizes that. It’s a ringing endorsement for the ideas behind ripple. Now, we just need to get to work implementing them.
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