Legal expert Jeremy Hogan presented a speculative argument about the potential role of XRP in the United States’ digital asset reserve. The suggestion comes at a time when discussions around the government’s potential involvement in cryptocurrency assets are gaining traction. According to Hogan, some Bitcoin enthusiasts are overly focused on decentralization when evaluating XRP’s suitability as a reserve asset. However, the government may view things from a different angle.
Bitcoin supporters have long raised concerns about XRP’s suitability for use in a national reserve, citing its centralized nature. Ripple, the company behind XRP, holds a significant portion of the total supply, which many argue could lead to potential manipulation or risk if XRP were included in a reserve. Critics often emphasize the decentralization of assets as a crucial factor in their long-term stability and viability as a reserve currency. However, Hogan suggests that the government may not be concerned with these crypto-specific features. Instead, they might look at XRP through a broader economic lens, much like gold and other traditional reserves.
Hogan asserts that the U.S. government is likely not focused on whether XRP is decentralized in the same way that crypto enthusiasts are. Instead, the government’s interest could be in how XRP might serve as an economic tool in the event of future global financial disruptions. If XRP were to be included in the government’s strategic reserve, it would likely be viewed as a hedge against potential future economic shifts, rather than just another cryptocurrency. The coin’s use could transcend its role in the crypto space and serve a broader purpose in the country’s economic strategy.
In this light, Hogan argues that the U.S. government might have a clearer understanding of future global events that could necessitate the use of a digital asset like XRP. The government could foresee situations where traditional financial systems may struggle, and digital currencies could step in to fill the gap. In such cases, XRP, with its speed and low transaction costs, could be an attractive option for governments to use as a hedge against economic instability.
Another point raised by Hogan is the potential for the government to step in and take control of Ripple if the company were ever to jeopardize the stability of the XRP ledger. Hogan draws a comparison to the actions taken by the U.S. government during World War II when it took control of gold reserves. In a similar manner, the government could theoretically seize Ripple’s XRP holdings, especially those held in escrow. This approach could be similar to how President Franklin Roosevelt’s 1933 executive order mandated the surrender of gold to the government.
Currently, the U.S. government has not made a final decision about whether to create a national digital asset reserve or which cryptocurrencies will be included. However, a presidential working group is already studying the potential risks and benefits of this initiative. This group is tasked with delivering a comprehensive report within 180 days of an executive order issued by President Trump, which directed the evaluation of digital asset markets.
Ripple has been actively engaged in these discussions and is working to ensure that any potential reserve includes a variety of digital assets rather than being solely focused on one cryptocurrency like Bitcoin. CEO Brad Garlinghouse confirmed in a previous statement that he had met with Trump to discuss the issue. The hope is that the reserve will represent a diverse collection of assets to ensure stability and flexibility in times of economic uncertainty.
While the idea of a U.S. digital asset reserve remains speculative, the discussions and potential involvement of major cryptocurrencies like XRP suggest that the landscape of global finance is shifting. As the digital currency market continues to evolve, government involvement may become an increasingly important factor in shaping the future of cryptocurrencies.
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