California-headquartered FinTech firm Ripple has announced a partnership with the central bank of the Kingdom of Bhutan, which is a landlocked country in the Eastern Himalayas.
According to the blog post Ripple published last Wednesday (September 22), the basic idea of this partnership is to help Bhutan’s central bank (aka “Royal Monetary Authority”) “use Ripple’s CBDC solution to pilot a central bank digital currency (CBDC) in phases.”
As you may remember, on March 3, Ripple announced via a blog post that it was “piloting” a private version of the open-source public XRP Ledger (XRPL) to allow central banks to create and manage their own digital currencies. The XRP Ledger was created in 2012 by David Schwartz, Jed McCaleb, and Arthur Britto, and XRP is the native currency of the XRP Ledger.
Back then, Ripple said:
- more than 80% of the world’s central banks are “actively exploring some form of sovereign-backed cryptocurrency”
- eventually there would be a wide range of central bank digitial currencies (CBDCs).
- existing public blockchains cannot meed the needs of CBDCs since “a Central Bank requires more transaction privacy and control over its currency than a public ledger can offer,” which means that it is “most likely opt to create a CBDC on a private ledger that can also operate at the required scale.”
Ripple also explained in that March 2021 blog post why interoperability is crucial:
“Additionally, interoperability – the ability for a private ledger to connect with today’s existing global financial infrastructure, as well as other CBDCs and other digital currencies– will be critical. In fact, in its 2021/22 innovation program, the Bank for International Settlements identified interoperability for cross-border payments as a major priority for CBDCs.“
Ripple’s proposed solution to this problem is the CBDC Private Ledger, which uses the same distributed ledger technology as the XRP Ledger, which means that it is “built for payments” and “designed for issuing currencies”; XRP could then serve as “a neutral bridge asset for frictionless value movement between CBDCs and other currencies.”
Ripple also said that transactions on the CBDC Private Ledger would be low-cost, reliable, and fast.
In last week’s blog post, Ripple mentioned that that this new initiative, which builds on top of the country’s payments infrastructure and capabilities, will tap use Ripple’s CBDC solution to “support seamless retail, cross-border and wholesale payment use cases for a digital Ngultrum.”
Ripple went on to say that the RMA “believes that easier, faster and more affordable payments, both domestically and internationally, will help it reach its goal of increasing financial inclusion by 85% by 2023.”
Finally, apparently, Ripple’s “commitment to sustainability was important for Bhutan.” As Ripple points out, its CBDC solution is “carbon-neutral and, because it’s based on the public XRP Ledger, is 120,000x more energy efficient than proof-of-work blockchains.”
According to data by TradingView, on crypto exchange Bitstamp, currently (as of 07:20 UTC on September 27), XRP is trading around $0.9637, up 4.3% in the past 24-hour period.
Ripple (XRP) Committed to the Crypto Climate Accord (CCA) To Provide for Sustainability
With cryptocurrency becoming mainstream, to provide for a long-term future together sustainability practices are very important. Major Fintech companies like PayPal, Visa, Tesla, and several others leverage this technology. This in turn has led to increased energy consumption to already unsustainable levels. To break even, the industry has a choice to make. Either continue down the unsustainable path to be doomed or work together and reduce the collective environmental impact.
Decarbonizing public blockchains is about bringing down the carbon footprint. In2020, Ripple partnered with Energy Web (EW) and the Rocky Mountain Institute (RMI) in their efforts to decarbonize public blockchains beginning with the XRP ledger. Further, Ripple has pledged to achieve carbon net-zero by 2030 or sooner.
Ripple is committed to the Crypto Climate Accord (CCA), which is a new initiative organized by EW, RMI, and the Alliance for Innovation Regulation (AIR) to ensure that the cryptocurrency industry is 100% renewable.
Ripple will also be joining more than 20 supporters from different industries and blockchains, which consists of the United Nations, CoinShares, Compass Mining, the XRP Ledger Foundation, and ConsenSys to provide for sustainability and scalability, thus creating value for all.
The cryptocurrency market cap is at $2 trillion, which is twice the previous all-time high that was reached about three months ago, thus underscoring how quickly this industry is growing.
The growth of the cryptocurrency industry comes at a cost. The damages caused by climate change cover for nearly 3% of GDP by 2060. The challenge to sustain global financial prosperity without compromising on the environment is a thing to be considered.
Emissions reduction and renewable energy use are steps to ensure progress in the right direction.
The Paris Climate Accord, fintech, and crypto industry leaders have partnered to set the objectives to ensure sustainability.
Key objectives include: “Enable all of the world’s blockchains to be powered by 100% renewables by the 2025 UNFCCC COP Conference; Develop an open-source accounting standard for measuring emissions from the cryptocurrency industry; Achieve net-zero emissions for the entire crypto industry, including all business operations beyond blockchain and retroactive emissions by 2040.”
Ripple’s journey in ensuring sustainability consists of recognition of financial technologies like blockchain and cryptocurrency to position financial empowerment without compromising on the sustainable future. Thus, providing for the critical years of commitment in the process of cryptocurrency adoption. Reverse engineering the characteristic of the technology after progress has been achieved can be tricking and sustainability will, in turn, have to wait longer. Therefore, Ripple is leading the effort and they feel it is time to solve the problem now.
Ripple is committed to progressing this effort by a strategic partnership with organizations like Rocky Mountain Institute, Energy Web, and AIR, eventually contributing to policy ideas and financing for innovations to help achieve the long-term objectives of Accord.
The attempt is expected to save the global economy an estimated $26 trillion by 2030, contributing to a robust and sustainable global financial system leading to a sustainable world.
SEC v. Ripple – Court orders plaintiff to ‘answer Ripple’s interrogatories’
Within 24 hours of the court approving the Securities and Exchange Commission’s request to postpone the discovery deadline to January 2022, Judge Sarah Netburn has responded to two pending motions in the SEC v. Ripple Labs lawsuit.
One of the motions was from defendants Ripple Labs and Chris Larsen to compel the SEC to supplement its responses to eleven of its interrogatories and two of Larsen’s. Meanwhile, the other motion from the SEC sought a protective order to relieve it of the obligation to respond to 29,947 separate requests for admission, as per the filing.
Judge Netburn has now granted and denied both motions in part.
The judge ordered the SEC to answer Ripple’s interrogatories and identify the specific terms of the “investment contract” from XRP sales. The order added,
“Ripple’s interrogatory is relevant (and precise) and will clarify whether the SEC contends that the terms of any contract identified in response to Ripple’s Interrogatory No. 1 created an expectation of profits by the purchaser of XRP.”
“Accordingly, Defendants’ motion regarding Ripple Interrogatory No. 2 is GRANTED, and the SEC must supplement its response to Interrogatory No. 2 to identify any specific contractual terms and not just implicit and explicit promises as previously identified.”
The SEC must also respond to whether it contends that “efforts by Ripple were necessary to effect any increase in the price of XRP.” The court granted most of the defendants’ motions to compel answers on interrogatories, except one.
This was the motion from Chris Larsen on when XRPL is fully functional. Judge Netburn denied it without prejudice for being “too vague,” with the parties ordered to confer clarity terms.
Meanwhile, the SEC’s motion for protective orders was also partially granted and denied. The judge granted protection on Defendants’ 28,849 RFAs, noting that “it is hard to view this stunt as anything more than theater.” The order added,
“The motion for a protective order is GRANTED on burden grounds. Having granted the motion to compel a response to Ripple’s Interrogatory No. 2, the protective order is also GRANTED as cumulative and duplicative of another form of admissible evidence.”
As the SEC and Ripple filed their responses, the timeline for the case may extend due to the postponement of the discovery deadline. This deadline was pushed so that the parties could complete the expert depositions and beef up their preparations.
Court Orders SEC to Answer Ripple’s Interrogatories
Ripple, however, has failed to bury the SEC in paperwork, with the judge granting the agency’s motion for a protection order against “unduly burdensome” requests
Magistrate Judge Sarah Netburn has ordered the U.S. Securities and Exchange Commission to answer some of Ripple’s hotly-contested interrogatories, which are meant to determine whether or not the plaintiff’s contentions can be supported by facts.
The agency will have to specify why the company’s XRP sales are investment contracts:
The SEC’s legal theory is not an excuse to avoid responding to Defendants’ factual inquiry. Nor is it a basis to answer a different question than posed.
In addition, the SEC will have to state whether it believes that Ripple’s efforts were key to boosting the price of XRP.
However, Ripple’s interrogatory about whether or not the XRP Ledger was fully functional prior to the start of the securities offering has been denied for being too vague:
The Court agrees that this interrogatory seeks relevant information. But Defendants’ interrogatory is too vague for the reasons identified by the SEC.
Netburn has also granted the SEC’s motion for a protective order, which allows the regulator not to respond to all of Ripple’s “unreasonably burdensome” interrogatories.
The agency claimed that covering all the 29,947 requests would take 104 days without “breaks or sleep.”
Earlier this week, the court also granted the SEC’s motion to extend the expert discovery deadline to Jan. 14, 2022, despite Ripple’s protestations.