Joel Katz, CTO at Ripple discussed the role of digital assets in the post COVID world with Barry Eichengreen.
The discussion focused on the current state of the global economy and on how digital assets fit in the post-COVID climate. Barry stated that the impact of the 2020 pandemic has very few parallels from the past.
Barry explained that there was never a need to shut down the economy and how this is likely to be a slow-motion crisis and about how there were no historical analogies for what we are going through. Despite the government funding to save businesses to protect the jobs, he stated that the current stimulus might lead to the problems of tomorrow.
Investors are expecting hyperinflation and are looking at investment opportunities which can help maintain the value if the price of the dollar would soar.
Barry stated, “Gold doesn’t really have any intrinsic value.” He clarified that gold will continue to hold value for as long as people believe it has got value. He stated that there is no industrial use case for Bitcoin than Gold. He expressed that people pay actual US dollars as they think people will value it and will pay actual dollars for it.
He also pointed to how speculative investments have come and gone throughout history. Therefore, that cryptocurrency might not sustain for long with a speculative image. Only those digital assets which provide for tangible services like cross border payments to be the ones that will have legs for survival.
Concerning the current economic situation he stated, “Better to ask an epidemiologist than an economist. The virus is still out there and as long as that’s the case, states and countries that open up will have to close down periodically. That will be a bumpy ride.”
In this regard, Sydney Ifergan, the crypto expert tweeted: “Ripple (XRP) might soon become a supplement to existing fiat currencies.”
Ripple (XRP) Helping Transfer Value
There is a need for bridge currency to fill the gap. The confidence in the worldwide fiat system is broken and for those who still believe they are going to lose hope soon. A worldwide financial crisis is on the dice and many opine that the collapse is likely to be dramatic and sudden.
There will soon be a need to change the order of things in a way to suit global political and functional needs. XRP might not replace the dollar; however, it is set to play a major role in helping transfer value.