Crypto Mentality

We've all seen this doc about $XRP & $XLM The IMF & World Bank refer to XRP/XLM as stablecoins As we know, USDC & USDT are examples of stablecoins Coins backed to a fiat currency. Obviously XRP & XLM don't follow this. But the IMF & World Bank don't specify WHAT exactly XRP & XLM are stable to. There's not a single currency that they use as a potential example for XRP & XLM to be pegged to. Instead they actually discuss the utilities of both XRP & XLM in their ability to be a bridge currency. Which ties in quite nicely given that you'd likely want a rather stable bridge asset. This is quite important as it shows the IMF & World Bank acknowledge the currency agnostic capabilities of XRP and XLM bridging cross currency payments. Though in theory, "stabilizing" the prices of XRP & XLM upon large adoption does make sense given their purpose of payments. The big question is WHAT their prices are stable to. This then leads us to another theory where Ripple CTO, had once said something quite interesting. In short David says that XRP can't be cheap since the use cases of it wouldn't scale to it's purpose. This is quite interesting, but in theory makes sense. XRP wants to be a liquidity and bridging solution for all the banks but theres a limited amount of XRP. On the other hand, XLM aims to be unlock value transfer for the people, but once again there's limited XLM. Total XRP: 99,987,452,475 Total XLM: 50,001,806,812 For the purpose of this example let's imagine XRP & XLM are both at $0.05. A dirt cheap price. Now lets say this central bank wants to send $5 Bil to another bank using XRP.... That equates to 100 Bil XRP. In other words, at $0.05 a single transfer of $5 Bil would use up more than ALL the XRP available. The same example can be applied with XLM though with many citizens sending money instead of banks. Now lets try this again, but this time XRP & XLM are both at $30. This time multiple central banks are sending large transactions at once totalling up to $60 billion. The amount of liquidity locked in this scenario is 12x as much as the example we just used. Yet this time, the total XRP used would only be 2 Bil! That's about 2% of the current total supply, Something MUCH more feasible to handle the load of a global payments network. In a sense, XRP & XLM scaling isn't so much to do with the network speed, they've proven that. But rather how divisible and scalable can the use of XRP & XLM get given their use case being so closely tied to fiat currencies and modern day payments. A truly interesting phenomenon. For these reasons, paired with the fact that we simply want stability in payments it would technically make sense to have XRP & XLM's prices pegged to something. We've proven why any fiat currency would be an unviable solution for this. If it was pegged to the USD, a transfer of $10 Bil would take up >10% of the total XRP supply. In other words with current prices of XRP at $0.58 & XLM at $0.10... This would not work at mass scale yet. Paired with the fact that we have to consider XRP & XLM are also held by millions users around the world, so we can't assume the total supply is the actual accessible supply at a given time. So what would XRP & XLM be backed to? Gold & Silver? Market Indicies? Something Else? Perhaps it could be one of these. But stability doesn't always have to come thru pegging an asset to a pre existing value. It could also refer to the fact that XRP & XLM being used in cross border payments would mean constant buy & sell pressure of the tokens at near even rates. In an idealistic scenario, the use and mechanism of XRP & XLM would stabilize itself thanks to the large liquidity and constant use. But even if that were the case... The point still stands that the current prices of XRP & XLM simply aren't fit for the long term vision of what the IMF & World Bank are discussing yet. But at the end of the day... This is just some fun speculation and research. It'll certainly be interesting to see how this plays out in the long run given the logic behind it. 𝐉𝐮𝐬𝐭 𝐬𝐨𝐦𝐞 𝐟𝐨𝐨𝐝 𝐟𝐨𝐫 𝐭𝐡𝐨𝐮𝐠𝐡𝐭🤔