XRP proposal seeks $1.5T liquidity boost for US

A recent proposal submitted to the U.S. Securities and Exchange Commission (SEC) suggests that integrating XRP (CRYPTO:XRP) into the U.S. financial system could unlock up to $1.5 trillion in liquidity.

The document, authored by Maximilian Staudinger, outlines a plan to use XRP as a strategic financial asset, potentially transforming the nation's financial infrastructure.

The proposal centers on leveraging XRP to replace traditional liquidity mechanisms in Nostro accounts, which are used for cross-border transactions.

Globally, these accounts hold approximately $27 trillion, with the U.S. accounting for about $5 trillion.

By integrating XRP, Staudinger estimates that 30% of these funds, or $1.5 trillion, could be freed up and redirected into the economy.

Additionally, the proposal suggests that using XRP for financial transactions could save the U.S. up to $7.5 billion annually in transaction costs.

It also recommends using some of the freed-up capital to establish a national Bitcoin reserve, although this aspect of the plan is marred by an error regarding Bitcoin's supply cap.

Staudinger's proposal calls for regulatory clarity by classifying XRP as a payment asset rather than a security, which would require an executive order from the President and cooperation from the SEC and the Department of Justice (DOJ).

The plan includes both a standard two-year implementation timeline and an accelerated six- to twelve-month option, contingent on swift regulatory approvals and mandates for banks to adopt XRP.

Despite its ambitious goals, the proposal faces scepticism due to its unrealistic elements and the lack of official backing from the SEC or other major financial institutions.

Critics argue that the plan's feasibility is questionable, particularly given XRP's ongoing regulatory challenges and the fact that two-thirds of its supply is controlled by Ripple, the organisation that issued the asset.

At the time of reporting, the XRP price was $2.36.