In a bold statement echoing across financial circles, Oliver Michel, CEO of Tokentus Investment AG—a leading German Web3 venture capital firm—has declared that XRP has the potential to evolve into the world reserve bridge currency. His remarks, delivered during a live interview on the floor of the Frankfurt Stock Exchange with Der Aktionär, spotlight growing institutional interest in blockchain-based solutions for global finance.
Michel’s endorsement centers on XRP’s unique utility in cross-border payments, its integration with central bank digital currencies (CBDCs), and Ripple’s innovative On-Demand Liquidity (ODL) solution. As traditional banking systems grapple with inefficiencies, his vision positions XRP not just as a digital asset, but as a foundational piece of future global monetary infrastructure.
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The Flaws in Traditional Cross-Border Payments
Today’s international money transfer system remains plagued by high costs, slow processing times, and excessive intermediary involvement. Consider a standard transaction from Germany to the United States: euros must pass through multiple financial institutions before being converted into U.S. dollars. Each step adds fees and delays—sometimes stretching settlement times to several business days.
Oliver Michel highlighted this inefficiency as a critical pain point Ripple aims to solve. He explained that Ripple’s entire business model was built around addressing these systemic flaws using XRP as a liquidity tool. Instead of relying on pre-funded nostro accounts, banks can use XRP to instantly bridge different fiat currencies.
Here's how it works:
- The sender initiates a euro payment.
- The originating financial institution converts euros into XRP at minimal cost.
- The receiving bank converts the XRP into U.S. dollars almost instantly.
- Funds are delivered to the recipient within seconds, with significantly lower fees.
This process eliminates the need for pre-positioned capital and streamlines settlement—making it faster, cheaper, and more scalable than legacy systems like SWIFT.
“That’s actually the motivation of Ripple – so that the banks or the central banks can exchange the classical currencies into XRP.”
Michel emphasized that this isn’t speculative fiction; it’s an operational reality already being tested and adopted by forward-thinking financial institutions worldwide.
XRP Ledger and On-Demand Liquidity: Building the Future of Finance
At the heart of Michel’s optimism lies the XRP Ledger (XRPL)—a decentralized, energy-efficient blockchain designed for fast and low-cost transactions. Paired with Ripple’s On-Demand Liquidity (ODL) service, XRPL enables real-time settlement without counterparty risk.
As central banks accelerate their development of CBDCs, interoperability becomes paramount. This is where XRP stands out. Michel believes XRPL could serve as a neutral, open-source protocol connecting various national digital currencies—acting as a universal bridge between them.
Unlike proprietary solutions such as JPMorgan’s JPM Coin, which operates within closed networks, XRP offers a permissionless, globally accessible alternative. Its first-mover advantage in cross-border settlements gives it a significant edge in adoption and network effects.
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Why XRP Could Become the Global Bridge Currency
Michel didn’t stop at praising efficiency—he went further, suggesting that XRP could emerge as the world reserve bridge currency once CBDCs go mainstream. This isn’t about replacing the U.S. dollar as the primary reserve currency, but rather about fulfilling a new role: facilitating instant, secure, and low-cost exchanges between sovereign digital currencies.
Key factors supporting this vision include:
- Speed: Transactions settle in 3–5 seconds.
- Scalability: The XRPL can handle up to 1,500 transactions per second.
- Cost-efficiency: Average transaction cost is less than $0.01.
- Sustainability: XRPL uses a consensus algorithm that consumes negligible energy compared to proof-of-work blockchains.
- Regulatory clarity: Ripple has been actively engaging with regulators globally, setting precedents for compliant innovation.
With over 42% growth in XRP-powered payments to global merchants reported in early 2024, momentum is building. Financial institutions are increasingly viewing ODL not as an experiment, but as a viable alternative to traditional correspondent banking.
As Michel noted:
“With its offer and if time plays for Ripple, then Ripple [XRP] can certainly become the world reserve bridge currency.”
This statement reflects a shift in perception—from crypto skepticism to serious consideration of blockchain’s role in redefining global finance.
Frequently Asked Questions (FAQ)
Q: What is a "world reserve bridge currency"?
A: It refers to a neutral digital asset used to facilitate seamless exchanges between different national currencies or CBDCs without relying on intermediaries. Unlike traditional reserve currencies like the U.S. dollar, a bridge currency doesn't dominate trade but enables efficient conversion across borders.
Q: How does XRP differ from other cryptocurrencies in cross-border payments?
A: XRP is optimized for speed and low cost, with transaction finality in under five seconds and minimal fees. Unlike Bitcoin or Ethereum, which prioritize decentralization and smart contracts, XRP focuses on institutional-grade payment efficiency and interoperability.
Q: Is XRP legally recognized for use in banking?
A: While regulatory status varies by country, several financial institutions already use Ripple’s ODL solution powered by XRP in compliance with local laws. Ripple has also made progress in clarifying XRP’s status through ongoing legal discussions, particularly in the U.S.
Q: Can individuals use XRP for international transfers today?
A: Yes. Individuals and businesses can send XRP globally within seconds at a fraction of traditional remittance costs. However, widespread consumer adoption depends on integration with user-friendly wallets and payment gateways.
Q: Does the rise of CBDCs threaten or support XRP’s role?
A: It supports it. CBDCs require efficient cross-chain settlement mechanisms. XRP’s existing infrastructure positions it as a natural connector between disparate digital currency systems.
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Final Thoughts: A New Era of Global Settlements?
Oliver Michel’s comments underscore a growing consensus among fintech innovators: the future of global finance lies in interoperable, instant settlement networks. While challenges remain—including regulatory alignment and institutional adoption—XRP’s technical advantages and strategic positioning make it a strong contender for bridging the world’s evolving monetary systems.
As central banks roll out digital currencies and demand for real-time payments grows, assets like XRP may transition from speculative instruments to essential components of global financial plumbing.
The journey toward becoming a world reserve bridge currency won’t happen overnight—but with advocates like Michel amplifying its potential on major financial stages, XRP is undeniably gaining credibility in the halls of traditional finance.
Core Keywords: XRP, world reserve bridge currency, cross-border payments, On-Demand Liquidity, XRPL, CBDCs, Ripple, blockchain finance