Ripple’s annual Swell conference in San Francisco featured a keynote address from former U.S. President Bill Clinton this year, and he had some kind words for blockchain technology.
During a post-keynote discussion with former economic advisor Gene Sperling, Bill Clinton said that, “This whole blockchain deal has the potential it does only because it is applicable across national borders (and) income groups. The permutations and possibilities are staggeringly great.”
The former President also dived into other issues that the world is facing, saying that socioeconomic policies, “work better as positive sum games.” Unlike politically loaded central banks, cryptocurrencies are truly nationless and very resistant to political pressure. The recent introduction of a European interbank clearing mechanism that circumvents SWIFT is a great example of how far politics have penetrated the financial system.
Bill Clinton seemed to pick up on widening schisms between long-time allies, and warned that, “We could ruin it all by negative identity politics and economic and social policy. You think about that.” The political gulfs that are emerging in developed nation are serious, but the lack of political will to find holistic solutions to global problems has been even more apparent recently.
Bill Clinton Sees Banking Solutions for the People
Cryptocurrencies offer global citizens a whole new way to do business. The hurdles that an ordinary person faces in the world of banking shouldn’t be understated. In many cases the population in an emerging economy is forced to remain in the unregulated cash economy, whether or not they want to use banks.
In places like Indonesia, the costs involved with opening and maintaining a bank account price the vast majority of the population out of the banking market. Not only does this make simple things like sending money far more expensive and time consuming, any sort of loans are out of the question.
Cryptos can be used to trade in very small amounts of value at nearly no cost. Numerous exchange platforms like CoinCola and Pundi X are working to bring some level of financial services to “unbankable” populations globally. Their platforms make trading cryptos easier, which enables the global poor to exit the cash economy, and gain access to a much higher level of financial services.
Nations can Benefit From Blockchain Too
Ripple’s platform is basically aimed at making interbank transactions far more efficient. Until a week or two ago, the only interbank transfer system that had a global reach was SWIFT. Now that the EU may have designed a system that would allow EU based financial entities to trade with US-blacklisted companies or nations, there could be another system in place that could be used instead of SWIFT.
At this point there is no technical impediment to eliminating slow, archaic systems like SWIFT, other than the regulations that exist in most nations for banks. In some countries, like Thailand and Singapore, cryptos and blockchain now have an effective regulatory structure.
In the USA, crypto regulations are moving at a much slower pace. Last week the U.S. Congress asked Jay Clayton, the Chairman of the Securities and Exchange Commission (SEC), how his agency plans to regulate cryptos via a letter. There has been no word from the SEC yet, but in some cases, people are being prosecuted in the USA under SEC code for bogus ICOs.
The Need for Real Regulations in the USA
Case law is a far cry from effective regulations, which is exactly what would allow large-scale blockchain and crypto development to move forward in the USA. Ripple has recently helped to form a new lobbing group that will work to help the US government in their efforts to create supportive crypto regulations. They also just launched their xRapid platform, which would make fiat-to-fiat transfers simple.
Of course, the potential profit for a platform like xRapid is enormous, even if it only costs a fraction of what a SWIFT transfer costs. Ripple looks like it is in a good position, and given the fact they were able to land Bill Clinton for their conference, they might be very successful in Washington D.C.