Gary Gensler Discusses Ripple use-case at MIT

About this Video

• Video Title: Gary Gensler Discusses Ripple use-case at MIT
• Channel: PlanXRP
• Speakers: Gary Gensler (and others whose names are not explicitly mentioned in the transcript)
• Duration: 00:13:17

Introduction

This video features a discussion with Gary Gensler about Ripple's use case in cross-border transactions. The main focus is on how cryptocurrencies, specifically mentioning XRP, could potentially improve the efficiency and reduce the costs associated with international money transfers compared to traditional correspondent banking.

Key Takeaways

• Cross-border payments are slow and expensive: Traditional methods involving multiple banks and correspondent banking create delays and high fees.
• Cryptocurrency as a bridge: Using cryptocurrency (like XRP or Bitcoin) as an intermediary between fiat currencies could potentially speed up transactions and lower costs. This involves converting fiat currency to crypto, transferring the crypto, and then converting back to fiat.
• Challenges and risks: This approach faces challenges including cryptocurrency volatility, the need for sufficient liquidity in the chosen cryptocurrency, and the added risk of two currency exchanges. The liquidity of XRP is questioned as being insufficient for large-scale transactions.
• Potential for efficiency gains: Despite the risks, the system could significantly reduce settlement times (potentially to seconds) and the number of intermediaries involved. This could be particularly beneficial for smaller transactions and remittances to underserved populations.
• The role of market makers: The process necessitates market makers to provide liquidity for the crypto-to-fiat conversions.