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Viewpoint: XRP may play a key role in Japan's $4.5 trillion Reverse arbitrage trading.
American model Bri Tracy recently explored the role that XRP might play in the reverse yen arbitrage trading in Japan, which amounts to a staggering $4.5 trillion. Tracy pointed out that XRP has fast and programmable settlement capabilities that meet the needs of modern financial infrastructure. She emphasized that the bank for international settlements (BIS) recommends effective settlement of assets to be turned over 8 to 10 times daily to ensure liquidity, while the turnover speed of XRP far exceeds this standard. Japan's SBI Remit has already started using XRP for fast cross-border settlements.
Reverse arbitrage trading refers to investors borrowing funds in low interest rate countries and investing in high-yield assets to obtain differential returns. Japan has long maintained a low interest rate, even negative interest rate environment, giving rise to a large-scale yen arbitrage trading. According to data from the Japanese Ministry of Finance, the trading scale is approximately 4.2 trillion to 4.5 trillion USD. After the Bank of Japan ended negative interest rates and raised the benchmark rate in March 2024, some arbitrage trades triggered reverse operations, with about 40% of trades closed and the remaining 60% still ongoing.
XRP2.13%
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