Alright folks while I personally love a good ole down the rabbit hole conspiracy theory – I am just seeing too many opinions about the XRP Escrow that would either make no earthly sense to me or would burn the XRP Ledger to the ground. With that being said, I can only speculate what may happen as well, but it is much easier to shoot down theories that have run rampant of late. So to quote the late Heath Ledger in The Dark Night “…and here we go!”

Please turn your attention to the tweet thread on the right from a popular lawyer personality for crypto on twitter. This twitter user probably is not the only one proliferating this theory in the ether, but my attention was drawn to his thread in a recent Youtube video sent my way and it fits the purposes of this blog/rant. In all fairness, Mr. XRP Attorney is just throwing an idea out there, so don’t take this as a personal attack against him. He is just the guinea pig here.

XRP Attorney’s theory resides around the idea of the United States’ ability to assert its eminent domain powers over the XRP Escrow as a matter of national security. This premise is already flawed from the get go, but let’s touch on eminent domain briefly. Eminent domain is the US legal term for a sovereign nation’s right to seize property, intellectual property, financial assets, etc. for public projects often in cases where these assets are of grave importance to the development and safety of the United States. This idea that the XRP Escrow is the property of Ripple and thus can be seized by the US government is laughable to me and completely ignores all of the work done to decentralize the XRP Ledger over the past eight years. The only way that the XRP Escrow is being handed over to the US government is if the non-Ripple validators choose to allow it. Now take a look to the left to see the David Schwartz tweet on the possibility of the XRP escrow to be burned. In short, this means that if 80% of the UNLs on the XRPL decide they want to burn the XRP Escrow, then it will be done regardless of what Ripple or the US government says. This is the beauty of a fully decentralized network.

For further clarity, the XRPL requires an 80% majority agreement to amend itself among the 37 validators of which Ripple only controls six. This means that Ripple only has roughly 16% of the voting power to amend the XRPL, which is neither significant enough to force through amendments or prevent them. In fact, there have been multiple amendments against which Ripple has voted that have still passed, thus showcasing the lack of control Ripple possesses over the XRPL. Therefore, Ripple does not have the final say on whether or not they hand over the XRP in escrow to the US government and you better believe that the bureaucrats know it.

I personally am not a believer in burning the XRP escrow as it can be used to incentivize participation and good behavior throughout the network, but it would be preferable to the US government squandering away one of the best opportunities for financial inclusion the world has seen. Additionally, I cannot imagine a greater show of XRP as a jurisdiction less digital asset, than for the US government to try to seize the largest majority of its supply only for it to be burned from their greedy fingertips. Really now, if the XRP Escrow was burned in this fashion, no one for the rest of eternity would be able to utter the inglorious FUD that the XRPL is centralized and personally I think the price of XRP would boom and not just because of the essentially halved supply. However, once again, this should be used as a last ditch effort by the validators to preserve the sanctity of the XRPL as their is some true non-monetary value in the escrow.

Now that we have covered why the SEC or any US entity cannot force Ripple to hand over the XRP Escrow on their own volition, we can discuss why this would be a poor move by the United States as well as for the XRP Ledger itself. The United States Dollar (USD) is currently the world’s reserve currency through the establishment of the Bretton Woods Agreement and later the petrodollar system enacted by former President Richard Nixon in the early 1970s that denominates the settlement of the sale of oil in USD. The United States was able to leverage the USD to the position of the world reserve currency through a series of events including its fortunes of vast gold reserves plus its victories in the two world wars of the 20th Century.

The world reserve currency status of the USD has allowed the Federal Reserve to proliferate the USD around the globe as the number one settlement currency for a host of different assets like stocks, bonds, commodities, and derivatives empowering the United States with the ability to sanction foreign nations around the globe for not complying with its ideals. This is a massive power for the US to relinquish, but based on the history of mankind is an inevitable one. This brings us to the main reason behind why the United States would want control over the XRP Escrow and that is to maintain its power of the over global transactions through the US banking arm, SWIFT.

It is not news to anyone well-versed in the crypto space that one of XRP’s main use cases, cross-border payments, would weaken the control the US government and banking sector has over the world. However, if the US decided to try to seize control of the largest supply of XRP, then the entire ethos of the XRPL would be destroyed in one foul swoop. Nations looking to avoid the manipulation of foreign exchange rates and the maintenance of their sovereign currency would no longer believe in the ideal of XRP as a global bridge asset for sovereign currencies to exchange through without affecting each other. The past eight years of work by the developers of the XRPL to decentralize the network and create a truly immutable ledger would be for not and aspirations for global financial inclusion in the near term could be dashed.  And despite its best efforts the United States would likely give up its chance to host one of the most pivotal firms in the future global finance.

Now, tell me why the globe would allow another 100 years of false promises and failed bureaucracy to control one of the most important future money supplies in XRP? Seriously, someone please give me a good reason in the comments. The United States is ceding its power every day to the likes of China, who is fast approaching a cryptocurrency solution of its own, and its seizure of the XRP Escrow would be the nail in the coffin. The best chance for the US to promote welfare in its own borders and across the globe would be through the rise of XRP, the global bridge asset. Countries around the world would host validators and have a say in the public ledger fostering a new world of cooperation and transparency as well as lowering the barriers of entry to finance for all.

In finality, as a community, we need to take a step back and get away from the fantastical. There are real solutions for the XRP Escrow situation like delegating it to the XRPL Foundation, incentivizing network participation and liquidity, or just leaving it in Ripple’s hands to continue on their goal to foster the Ledger’s growth. And before you scream “muh… Ripple dumps on investors to stay afloat, ” we need to get real. Ripple is worth over $10B as a private company. The venture capital world calls this a Decacorn. Ripple is looking to IPO, which would fund them for years to come. They do not need the XRP Escrow to continually run their business and their mismanagement of the escrow would be the undoing of their entire business model. Also, who in the world wants the mismanagement of the Fed or US Treasury to proliferate into the new decentralized world of finance? Those two entities have presided over numerous recessions and depressions all while printing their currency ad nauseam fueling class divides across America.

Blockchain and the theories of decentralization were meant to free the world from central authorities devoid from reality of the common man. Its hands do not build, only suppress and the case will be the same if the XRP Escrow is seized by the US government. I am all for speculation within in reason and the forfeiture of the XRP Escrow to a governmental body is not the answer, it is surrender to the dying embers of the old, centralized world.