Mat Hamilton, a former director of developer relations at Ripple, took to Twitter to dispel rumors of a government buyback of the XRP token.
In a thread, Hamilton stated that a small but vocal group within the XRP community is suggesting the idea of the US government buying back or confiscating XRP from citizens at a vastly inflated rate, which he deemed “crazy.”
In his Twitter thread, Hamilton highlighted the numerous economic and technical flaws in this thinking and specifically debunked the argument that the government could do to XRP what they did with gold in the 1930s.
He emphasized that there are many reasons why this idea is illogical and that he had even come up with more reasons in the evening.
The former director of developer relations at Ripple used an analogy to explain why he is so dismissive of this line of reasoning.
He compared it to a scenario where a disease in the 1930s killed off all the horses, and today a group of people tries to reason that the same sort of disease could kill off all the cars today.
He stated that this is as nonsensical as it sounds, as horses and cars are totally different in terms of their makeup, and just because a disease could have affected one does not mean it could affect the other. He also added that he is not a vet or a mechanic, but the difference is clear.
Three Reasons By Ex-Ripple Director
The ex-director of Ripple has stated that gold and digital assets like XRP are fundamentally different and should not be compared. He notes that the characteristics, timing, and environment surrounding the two assets are vastly dissimilar.
He also acknowledged the possibility of the US government regulating XRP for use by US citizens but emphasized that it would not be because of similarities to past regulations on gold.
Additionally, he asserts that digital assets like XRP and Bitcoin do not have intrinsic value like gold, but their value is determined by a decentralized group of people agreeing on a set of rules for transactions.
Therefore, he highlighted three specific facts, including the unique characteristics of XRP, a digital asset that lives on a decentralized blockchain, compared to traditional physical commodities like gold.
Secondly, he noted that XRP could not be seized except through the duress of its key holders. He also suggested that if the US government were to want to take control of all the XRP for its own use, it would be more efficient for them to create its cryptocurrency or CBDC.
In third fact, he warned that if the US government were to take control of all the XRP to prevent others from using it. It would effectively kill any value or utility of XRP, as the remaining participants could simply decide to ignore it or create a new version of XRP.
Hamilton stated that:
So hopefully, you can see there is no logical reason why a government would *both* “seize” XRP from its citizens, *and* pay them way above market price for it as well.
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