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Bitcoin maximalist Pierre Rochard argued Ethereum and XRP could not sustain long-term value by tokenizing securities.
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He cited the dominance and rise of low-cost alternatives such as Tron, while pointing out the traditional institutions like DTCC.
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The thesis states that ETH or the XRP will extract fees, from the world’s most poorest people who have the least money to invest.
Bitcoin-maxi Pierre Rochard stated that Ethereum and XRP could not sustain value through securities tokenization. His remark was made on X where he weighed-in on whether Ethereum and XRP Ledger Blockchains can improve settlement system.
Rochard questions Tokenization Value
Rochard argued the investment case for Ethereum or XRP is based on securities being issued through their networks and transaction fees being burned to benefit holders. He said that this thesis is weak due to two main challenges.
He explained that the first challenge is the role played by the Depository Trust and Clearing Corporation, which clears most of the U.S. Securities Trades.
Related:CryptoRank adds Tokenized stocks, S&P500, and gold to platform
DTCC, as a cooperative owned and operated by its members has no incentive to adopt a model of fee-burning. He said that exchanges like ICE and Nasdaq provide low-cost, efficient services, which leaves little room for Ethereum or XRP.
Competition from Other Blockchains
Rochard said that the second biggest obstacle is competition. He argued that because blockchain code is an open source, new networks could easily emerge to drive down fees. He noted that the majority of tokenized trading occurs on Tron via Tether’s USDT and not on Ethereum or XRP.
“The thesis is that ETH or XRP would extract fees from those who have the least money to invest, the poorest people in the world,” Rochard wrote in his post.
Debate on Security and Reliability
Other participants reacted to Rochard’s remarks. David Simic, an analyst, argued that Ethereum’s security and liquidity act as strong deterrents to competition.
Rochard responded that security is less important for tokenized assets, because issuers are always able to freeze or reverse transactions. This makes the legal authority the ultimate control point. “That’s why there’s no problem that USDT has such a large volume on Tron,” said Rochard.
Simic countered by saying that relying on reversals leads to inefficiencies and undermines the reliability of the system, comparing this to friction caused by chargebacks. He said that tokenization requires a reliable system in order to achieve its goal.
Support for Blockchain Settlement
Others defended the role of blockchain in securities markets. Participants using the name Wholistic claimed that current settlement systems used in traditional finance are outdated, have counterparty risks and require collateral to be held at clearinghouses.
He argued that the blockchain allows for instant and verifiable settlements, allowing investors “pristine bearer asset” that reduces systemic risk.
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Rochard denied this claim, saying that settlement inefficiencies can still be resolved without blockchain technology. He also maintained tokenized securities are different from bearer assets like Bitcoin.
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