- State Bank of Pakistan (SBP) acknowledges Ripple and XRP’s promising role in global payments.
- Despite praising crypto capabilities, the SBP emphasizes the potential risks in the burgeoning industry.
The State Bank’s Ripple Effect
The State Bank of Pakistan (SBP), in its 2022 financial stability report, has shed light on the burgeoning role of Ripple and XRP in the worldwide payment ecosystem. This recognition marks a significant turn, especially considering the bank’s history of not legally sanctioning any cryptocurrency.
Treading Cautiously Amidst Recognition
While the SBP’s report underscores the potential benefits of crypto assets, it also emphasizes the need for certain pre-conditions to actualize these advantages. Moreover, even though there’s a growing enthusiasm for platforms aiding cross-border transactions, like Ripple’s XRP, the volume of such operations remains a tiny fraction in the global arena of cross-border payments.
This nuanced stance is set against an ever-changing backdrop of cryptocurrency integration into conventional finance systems. As institutions worldwide grapple with the disruptive potential of digital currencies, the SBP’s report strikes a balance between acknowledging the future and exercising caution.
Delineating the possible downsides of the crypto industry, the report cites challenges like the potential misuse of cryptocurrencies in illicit activities, such as money laundering and financing terrorism. The reference to the Silk Road saga, a now-shuttered dark web marketplace, and the downfall of entities like the FTX crypto exchange and Terraform Labs’ ventures, emphasizes the volatility and risks inherent in the crypto realm.
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Stablecoins: The Silent Revolution
It’s intriguing to note the contrast in the SBP’s perspective when juxtaposed against the global momentum cryptocurrencies have achieved, particularly the rise of stablecoins. Alex Gladstein, from the Human Rights Foundation, highlighted in a recent study the monumental market traction stablecoins witnessed in 2022. Astoundingly, stablecoins managed on-chain settlements worth over $11 trillion, overshadowing PayPal’s $1.4 trillion and almost matching Visa’s $11.6 trillion. Furthermore, they accounted for 14% of transactions processed by ACH and slightly over 1% of those handled by Fedwire.
As the article closes, XRP’s price stands at $0.5188, having relinquished most of its gains following Ripple’s legal victory over the US Securities and Exchange Commission. Immediate hurdles for XRP include the 200-day EMA at $0.5251, with a potential target set at $0.5540 if surpassed.
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