Ripple CTO David Schwartz has spoken in a recent tweet about the XRP buyback proposal that first appeared in 2021 and now reappears with a second iteration. The controversial proposal is currently being debated again on Twitter after Valhil Capital CEO Jimmy Vallee brought up the idea again.
The theory is based on the belief that XRP will become the world’s reserve currency when government debt increases worldwide and all banks switch to ISO 20022 and use XRP to conduct cross-border monetary transactions. This means that governments around the world will have to buy XRP in large quantities.
According to Vallee, this will create the need to buy back, as the purchase of XRP by the government is not possible on the secondary market. In addition, Valhil Capital executives also pointed to the need for cases like Bretton Woods in this context, where the XRP IMF considered the token as an eSDR (Special Drawing Right) and the XRP holder had to sell the token to the government at a fixed price, like gold.
Vallee, Valhil Capital and the confidential committee will be responsible for providing information on the best possible outcome under the circumstances. Indeed, Vallee estimated the value at $50,000 per XRP. This price and theory really makes for a heated discussion. And Ripple CTO David Schwartz has also been notified.
What people do not know about #XRP buyback proposal pic.twitter.com/HpN3gphth9
— CryptoLewLew (@cryptolewlew) December 15, 2022
Ripple Execs Slam The XRP Buyback Theory
However, Schwartz did not leave a good mark on the XRP buyback proposal. According to Schwartz, it is appear like a fraud on the surface. Ripple’s CTO said that he has not yet examined the theory, but made a comparison with the scams of 2012 and 2022.
“I haven’t seen it clearly. But what I’ve seen looks like a scam to me. If we’ve learned anything from 2012 and 2022, anyone who promises high returns with low risk is going to rob you,” said Schwartz.
According to the comparison with 2022, Schwartz apparently shows the collapse of Celsius, 3AC, BlockFi and also FTX. The comparison to 2012 is a little unclear, although he may be referring to Trendon Shavers’ Bitcoin Savings & Trust (BST).
BST is a pyramid scheme established by Shavers in November 2011, offering a very high interest rate of 7% per week. At that time, the so-called investment platform attracted 500,000 Bitcoins, and collapsed in a year after Shavers misused the money for personal expenses.
Matt Hamilton, former director of developer relations at Ripple, also considers Vallee’s claims illogical. In a series of tweetshe doubted the calculations, writing:
OK, so again you assume that 100% of global GDP will translate into XRP value? Why? All exported goods, oil, food, financial services. You think 100% will magically become the value of XRP in the next decade? how?
Another question that remains unanswered, according to Hamilton, is why the US government wants to buy back XRP from its owners at “a very high market price.”
At press time, the price of XPR followed broader crypto market sentiment and was down 3% in the last 24 hours, trading at $0.3979.
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