In a surprising revelation from the State Bank of Pakistan (SBP) in their 2022 financial stability report, the institution acknowledged the nascent, albeit “promising work” of Ripple and XRP, in the global payment ecosystem.
State Bank Of Pakistan Praises Ripple And XRP
“While crypto assets offer some benefits, the realization of these benefits still requires enabling pre-conditions,” the report states. “Furthermore, while some encouraging work is being conducted to support cross-border payments (e.g., through Ripple’s XRP), it still is only on a minuscule level compared to the volume of cross-border payments globally.”
The State Bank of Pakistan, in their 2022 financial stability report, takes a dim view of crypto, noting #XRP as encouraging work despite its small size compared to global payment volume.https://t.co/t3SQu9CRkZ pic.twitter.com/1tgTWEpSF0
— WrathofKahneman 🪝 (@WKahneman) August 22, 2023
This comment comes amid a backdrop of evolving cryptocurrency dynamics and its penetration into mainstream finance. With the SBP recognizing the potential of cryptos like XRP in facilitating cross-border transactions, there’s a broader acknowledgment of the evolving financial landscape.
However, the bank maintains a cautious stance. The report went on to highlight the inherent risks that cryptocurrencies bring along, such as their potential use in money laundering and terrorism financing. It brought up the notorious case of Silk Road, the now-defunct dark web marketplace. Additionally, the document also referred to the collapse of the FTX crypto exchange and the disintegration of Terraform Labs’ projects, indicating the volatile nature of the crypto industry.
Despite the caveats, the SBP’s acknowledgment of XRP’s capabilities is noteworthy, especially against the background where the bank has not recognized any cryptocurrency as legal tender.
Stablecoins Gain Large Market Share
What’s intriguing is how the SBP’s view stands in contrast to the global traction cryptocurrencies, especially stablecoins, have gained recently. Alex Gladstein, Chief Strategy Officer at the Human Rights Foundation, pointed out the huge market share stablecoins have gained in 2022, according to a new study.
The report states that stablecoin settled over $11 trillion on-chain, dwarfing the volumes processed by PayPal ($1.4 trillion), almost surpassing the payment volume of Visa ($11.6 trillion) and reaching 14% of the volume settled by ACH an over 1% the volume settled by Fedwire.
At press time, the XRP price was trading at $0.5188. Thus, XRP has lost almost all the gains that were created as a result of the euphoria over Ripple’s victory against the US Securities and Exchange Commission. Currently, XRP is facing the 200-day EMA at $0.5251. If a breakout succeeds, $0.5540 would be the next target.
Featured image from Hamid Roshaan / Unsplash, chart from TradingView.com