Bitcoin Is A Strategic Asset, Not XRP

A recent proposal submitted to the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force by Maximilian Staudinger argues that XRP should be considered a “strategic financial asset” for the United States. However, upon closer inspection, it becomes clear that this proposal is based on questionable logic and flawed math.

In the proposal, Staudinger suggests that by implementing certain regulatory conditions, such as classifying XRP as a payment network and mandating its use by banks, $1.5 trillion could be freed up for the U.S. government to purchase 25 million bitcoins at $60,000 each. This proposal raises several red flags.

First and foremost, Nostro accounts are simply accounts that U.S. banks hold in foreign countries. The idea of replacing these dollars with XRP and then having banks turn over these funds to the government to purchase bitcoin is illogical.

Secondly, the proposal fails to address how banks would obtain the necessary XRP to replace the dollars in Nostro accounts. Even if Ripple were to provide the XRP, it does not have enough supply to cover $1.5 trillion.

Furthermore, the proposal overlooks the fact that bitcoin has a hard cap of 21 million coins, with approximately 4 million already lost. Suggesting that the U.S. government could purchase 25 million bitcoins is simply not feasible.

In contrast, bitcoin is a globally distributed asset with a robust network of nodes that protect its security. This, along with its widespread adoption as both money and a store of value, makes bitcoin a logical reserve asset.

In conclusion, the flawed logic behind the proposal for XRP as a strategic asset highlights the superiority of bitcoin as a strategic asset. It is hoped that the SEC will recognize these shortcomings and focus on more viable investment opportunities.