On May 1, parliamentary hearings in the UK criticized Ripple project. This particular hearing has touched cryptocurrencies technology topics and Ripple in particular.
Criticism did not come from members of Parliament, but from Martin Walker in particular, director of banking and finance at Evidence-Based Management, who spoke before the Treasury Committee.
"You need someone to provide the liquidity to be able to change into and out of Ripple. And holding Ripple, a currency which has seen its price drop 80 percent and then back up 100 percent in the course of the last two months is just not credible. So, putting cryptocurrencies into the financial sector is a huge source of risk."
They provided written evidence that Ripple, ICO Tezos and Monero are cause for concern. These concerns were described as follows:
1. Classes of investments that are practically unable to generate a positive income, except for investors who benefit from the arrival of new investors that bring additional funds.
2. Intentional concealment of the true nature of risks, income streams or investment beneficiaries.
3. Intentional structuring in an attempt to avoid falling under existing laws and regulations.
4. Uneven distribution of information between investors and organizers / beneficiaries of the scheme ".
According to the statement, Ripple falls under all four points, and Monero - under one, given the anonymous character of the cryptocurrency. Walker argued that blockchain technology cannot provide anything to banks and financial services.
"Usually the bank sent a SWIFT message to another bank, in which it asks the bank to make a payment from its account. Using Ripple technology, you send a similar message that falls into the infrastructure in Ripple and eventually reaches the other side. Therefore, you just add an extra level of complexity. "
Walker argues that when it comes to payments, Ripple does not make the process more efficient, but acts as an intermediary and increases the number of stages to pass:
He also stated that it is inappropriate to discuss blockchain technology as a single entity, since essentially every cryptocurrency is a modified version of Bitcoin original blockchain Satoshi Nakamoto designed. Despite its negative outlook for both Ripple and blockchain technology in general, Walker acknowledges that the hype surrounding the industry has served as a catalyst for banks to update some of their proposals.