As global financial systems face mounting strain, Digital Ascension Group (DAG) CEO Jake Claver argues that XRP could benefit from a structural transformation in how liquidity moves across markets.
In a recent commentary, Claver outlined how inefficiencies embedded in legacy banking frameworks continue to lock trillions of dollars out of productive use, creating conditions that favor neutral, real-time settlement assets.
Legacy Banking and the $27 Trillion Liquidity Constraint
Claver pointed to the continued reliance on correspondent banking structures, particularly the use of nostro and vostro accounts, as a major source of inefficiency. According to his assessment, banks worldwide must collectively immobilize roughly $27 trillion to facilitate cross-border payments.
This capital remains parked to ensure transaction completion, rather than circulating through lending, investment, or economic activity.
While the recent global adoption of ISO 20022 has improved data standards and communication between institutions, Claver emphasized that it does not resolve the underlying settlement delays. In his view, the standard serves as an upgrade to messaging infrastructure, not a solution to liquidity fragmentation or pre-funding requirements.
Why Stablecoins Do Not Solve Institutional Settlement
Claver also challenged the notion that stablecoins alone can address these issues. He argued that most stablecoins function as liabilities tied to specific issuers, making them unsuitable as neutral settlement tools between competing institutions.
From a balance-sheet perspective, banks remain reluctant to hold digital liabilities issued by other entities, particularly at scale.
He further noted that widespread institutional reliance on stablecoins could recreate existing inefficiencies. Managing multiple issuer-specific digital assets would fragment liquidity and increase operational complexity, undermining the efficiency gains the technology aims to deliver.
XRP as a Neutral Settlement Layer
Against this backdrop, Claver positioned XRP as a settlement asset designed to operate independently of institutional balance sheets. He highlighted XRP’s ability to facilitate value transfer without pre-funded accounts, while settling transactions in seconds at low cost.
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According to Claver, this neutrality allows XRP to function as a bridge between financial infrastructures without introducing counterparty exposure.
He also referenced the XRP Ledger’s operational history, noting its long-term stability and extensive testing by financial institutions for backend settlement use cases rather than consumer-facing payments.
Tokenized Deposits, AMMs, and Market Structure Shifts
Claver suggested that banks are more likely to adopt tokenized deposits and on-chain financial products than to rely on public stablecoins. These instruments allow institutions to maintain yield from treasury holdings while enabling real-time settlement and programmability.
He also addressed the growing role of automated market makers on networks like the XRP Ledger, arguing that they can reduce liquidity gaps, tighten spreads, and improve price efficiency through continuous rebalancing.
Finally, Claver warned that high leverage, rising debt levels, and prolonged restrictive monetary policy could trigger a broad market repricing across asset classes. However, he framed this as a transition rather than a collapse.
In such an environment, governments and institutions would require real-time settlement systems, shared ledgers, and programmable financial infrastructure to manage liquidity and policy execution effectively.
Within that framework, Claver believes XRP could benefit as financial markets shift toward more automated, efficient, and interoperable settlement mechanisms.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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