Last week (17-18 July 2018), at the Beyond Blocks Summit in Seoul, South Korea, Ran Neu-Ner, CNBC’s “Crypto Trader”, did an interview with Michael Arrington, a partner at XRP-denominated cryptoasset hedge fund “Arrington XRP Capital”, during which they talked about XRP.

Arrington, who announced his hedge fund on 28 November 2017 at Consensus: Invest 2017 conference in New York, said at the time that his crypto-focused fund would be entirely denominated in XRP. In the blog post about the announcement, Arrington explained what this means: 

  • “Investors contribute XRP to the fund, not dollars or other fiat currency.”
  • “All distributions, fees, etc. will also generally be paid in XRP (with some exceptions for LPs desiring different currency distributions).”

He described his reasoning for denominating the fund in XRP as follows:

“First, having a hedge fund denominated in a cryptocurrency makes things far easier for investors who already hold a lot of cryptocurrency. No need to convert back to fiat and then later back to a cryptocurrency as we make investments. Everyone saves fees and time that way.

Second, XRP, developed by Ripple, is particularly useful for us. While we don’t have a commercial relationship with Ripple (they are not investors in our fund, for example), we are still  able to use their super-fast and secure settlement infrastructure, as anyone else can. That means non-U.S. investors in our fund will have an easier time investing in us and making redemptions later. No need to rely on ancient fiat methods for cross-border currency transfers that are slow and laden with fees.

We’ll pay our own fees and salaries out in XRP as well.”

During the interview with the CNBC Crypto Trader, Arrington was asked why he had chosen to denominate his fund in XRP. Arrington replied:

“XRP is a really really good way to move money. So, we denominate our fund in XRP because it's a fantastic way to move money cross-border very quickly at almost zero cost. So, there's a lot of tribalism in cryptocurrency… The one thing they all agree on is they all hate XRP because it's centralized, they think it's corporate-managed, etc. I mean, none of that is really true. But what it is is it's a fantastic way to move money. And while the other more decentralized cryptocurrencies sort of find their way toward becoming more efficient, in the mean time, XRP is fantastic. So, from a hedge fund point of view, it's great to denominate ourselves in XRP.”


Interface Image Credit: Image Courtesy of Beyond Blocks