The US-Iran war escalations have brought back an Iran-backed study on Ripple’s XRP and it’s use for cross-border payments and XRP. The recent conflict has led brought sanctions and international transfers, as well as other financial issues into spotlight, which has turned heads towards XRP.
Iran-Based Ripple XRP Research Uncovers Market Shock Stimulations
However, the Iran-based doesn’t necessarily indicate that Iran will use XRP. It also doesn’t mention the current conflict as it’s a report from 2021. But because of its emphasis on “fast, cheap and adaptable” international settlement, the research on Ripple XRP is taking on a new meaning in the context of the ongoing geopolitical crisis.
For further context, the study approaches the future of Ripple’s XRP in the field of international transfers in a somewhat quantitative way. It has several models, and uses “Monte Carlo simulations (10,000 paths).”
Some of these include the “Hidden Markov Model (HMM)” and the “Heston stochastic volatility model.” The researchers also include “95% VaR and CVaR”, which is used to analyse potential downside risk.
It’s not a payment structure based on a single payment method either, per the report. Moreover, the research looks at three RippleNet corridors: USD/MXN, EUR/NGN and JPY/KRW.
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In addition, the researchers added “3σ jump detection” to the model to be able to recognize and identify particularly large XRP price jumps in extreme market situations. Then the study looks at how payment routing might evolve to meet those evolving circumstances.
That is important because cross-border settlement is not occurring in a vacuum. When using a volatile digital asset like Ripple XRP, a payment system must deal with the unexpected moves of the market. Additionally, it must simultaneously ensure transactions are completed in a timely and efficient manner.
US-Iran War Gives Old XRP Research A New Audience
Further, the timing of the Iran-linked Ripple XRP research is crucial as the US-Iran war is taking a new turn.
The research is associated with an Iranian academic institution. Thus, the current US-Iran war has brought back the discussion on sanctions, international payments and reliance on traditional financial systems.
This is not to be interpreted as Iranian policy. It did not suggest that Iran would be using XRP for payment. Also, there was no mention in the paper of the researchers suggesting XRP as a payment system for the Iranian government. On the other hand, Iran is using Bitcoin and Tether payments to carry on trade amid sanctions.
Instead, the paper poses a much larger question: how will Ripple’s XRP based settlement fare during market volatility?
The solution it offers is a framework focused on volatility and risk and adaptive routing. The older research is now being read by geopolitical pundits, as alternative payments systems are now coming into focus.
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