Crypto Riches for Investors - Part 5
Abraham George Crypto Musings
Read Part 1, Part 2, Part 3 and Part 4 if you haven’t already.
All along I have been discussing XRP and yet there is more to cover. However, in this article, let me change gears and have a look at some of the other interesting altcoins.
Once regulations come into play, not more than 100 coins out of the 19,500 will survive. But meeting the ISO 20022 is also a very important issue. Currently, there are only five coins that are ISO 20022 compliant. They are expected to come into effect by this November. Those tokens are XRP, XLM, XDC, ALGO, IOTA, and the stablecoin USDC. The above coins are the ones that have been selected by the many financial institutions on which they have been working for years. By the end of this year to early 2023, about 80% of high-value transactions will be done using ISO 20022.
While there are many interesting projects like Cardano, Dogecoin, Avalanche, Polygon, Hedera, etc, I would like to stick with the ISO 20022 compliant tokens. I reckon all tokens will become compliant by 2025. Out of the five tokens that are compliant now, I am invested in only three. XRP, XLM, and XDC. I believe these three should make you enough money in the markets.
In the same way as XRP, XLM is a token created by Jed McCaleb the co-founder of Ripple and it is owned by the Stellar Lumens networks. XLM is also a cross-border payment system that acts as a bridge between digital and fiat currencies. It is also a low-cost, open-source, decentralized protocol for transferring fiat currency to digital currency at high speed. It allows cross-border transactions between any pair of currencies. XLM should play a major role in the retail sector and the almost 2 bio people who do not have a bank account but will be able to transfer payments or make currency exchange on their mobile or computers.
While XRP will be for large cross-border transactions and CBDCs, XLM will be a tool for everyday people. Both are complementary technologies. I think both will be successful. While XRP is my major holding, my second choice is XLM.
The Goldman Sachs sponsored Circle/USDC is also built on the Stellar Network. IBM and Moneygram also use the Stellar Network. Brazil and Ukraine are working with XLM in developing their respective CBDCs.
XDC is also an ISO 20022 compliant token built on the XinFin Network. XinFin is a blockchain for the financial part of the internet of value where global finance and trade companies are involved. It had an initial coin offering in 2018 (like an IPO) and went live in 2019. It is designed to complement the legacy ecosystem by providing a permissioned blockchain that governments, enterprises, and private firms can use. The brains behind this technology are three Indian-origin young men namely Ritish Kakkad, Atul Khekade, and Karan Bhardwaj. It is working on trade finance and other enterprise use cases. It handles 2000 trades per second and settles in two seconds for a cost of less than a penny.
IOTA is the first distributed ledger built for the “Internet of Everything” a network for exchanging value and data between humans and machines. IOTA protects the integrity and verifiability of data. It will record and execute transactions between machines and devices in the Internet of Things (IoT).
Algorand is a DeFi cryptocurrency and blockchain technology that enables the simple creation of next-generation financial products like security tokens, cryptocurrencies, stablecoins, etc. One of the largest angel investing/venture capital crowdfunding platforms, Republic used Algorand to issue a profit-sharing token and raise US$16 Million. It is scalable and supports fast and secure transactions. It was developed by Silvio Micali, an MIT Professor. It is interoperable with other tokens on the XRP ledger and is compliant with ISO 20022. My team had briefly toyed with the idea of using Algorand to issue security tokens as a proxy for fund shares but later I dropped it as the infra was still nascent.
After Bitcoin and Ethereum, one of the most talked-about tokens is Dogecoin. It has been around since 2013. Off late, it had received a lot of attention. Elon Musk has been the loudest and most prominent supporter of Dogecoin. One bizarre tweet to his over 50 mln followers in April 2021 when Musk tweeted “dog barking at the moon”, the coin really surged to the moon. So what does it actually do? It is still not ISO 20022 compliant but is a peer-to-peer form of money. It is a decentralized form of currency and was started as a meme/joke. It was a fork (a variation) of the blockchain of another crypto called Litecoin. Litecoin was created from a fork of the Bitcoin Core blockchain to reduce transaction fees.
Doge gained a lot of traction after billionaire celebrities like Mark Cuban the owner of the Dallas Mavericks basketball team said that his company will accept Dogecoin for payment of Mavericks tickets and merchandise. About 40 companies have already approved the use of Dogecoin as a currency to buy their products. Amazon, PayPal, eBay, AMC Theatres, and many other payment companies and retailers are looking into the possibility of accepting Dogecoin. Stay tuned!
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Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and multi-billion dollar portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office and a hedge fund. Currently, he is a co-founder of a new hedge fund where foreign citizens can invest in Indian growth stocks like Tanla operating in hyper-growth markets like CPaaS.