Take for example a young Filipino developer, Maria, working late into the night in her cramped Manila flat. She’s building a groundbreaking platform in DeFi to change that. With direct access to the global market, farmers in Luzon will find it easier to enjoy fair prices for their crops — thanks to this groundbreaking tool. She’s definitely got the vision, as well as skills and the puso (heart), but what she really needs is capital. Will Amber’s $100M crypto reserve be their secret lifeline, or yet another wave crashing against the shores of small-time dreams?

Asian Crypto Dreams: A New Dawn?

Amber International’s announcement of a $100 million South Pacific crypto ecosystem reserve is without a doubt, ambitious. Investing in XRP, Bitcoin, Solana — the entire blockchain ecosystem with all their innovations and including stablecoins — is very promising. If successful, this move could significantly change the Asian crypto landscape. To be frank, the region is bubbling over with incredible talent and innovation. Finally, we’ve been treated to some spectacular projects out of Singapore, Hong Kong and yes—the Philippines.

The potential benefits are clear. Increased funding opportunities for startups like Maria's. Legitimization of the Asian crypto market, luring more VC eyes. A boost to the entire Web3 ecosystem. Amber’s plan to create and implement an AI-powered decision tool is ambitious and exciting. It conveys that she will make data-driven decisions to find the most promising projects. …and don’t forget the big picture of bridging DeFi and TradFi. If we get it right, we stand to realize incredible new possibilities.

So before we all start playing kundiman music and throwing confetti over a crypto revolution, let’s pump some cold water on this.

Big Fish, Small Pond: Who Benefits?

Yet even in the crypto world—where decentralized ideals abound—the power dynamics are often the same as in traditional finance. $100 million is a lot of money. Or will it really end up spilling down to the small business level, equipping small startups and indy devs. Or will it just entrench the incumbents, deepening the moat for the biggest big fish?

Here are a few insights that stood out from my conversation with Ben, a Filipino founder who’s building a blockchain-based remittance platform. He tells us at first glance this seems like good news. He’s most concerned that it will increase the difficulty for them to be able to compete. We’re going to have enough trouble getting heard above all that noise.

Ben's concern is valid. Amber’s goal when making investments is to be equitable and inclusive. It will emphasize projects that represent the pillars of decentralization and community empowerment. Will Maria—coding her app away in Manila—stand a chance? Or will the AI-powered decision tool prioritize projects where connections and resources already exist?

We need more transparency. More accountability. We need to ensure that this isn't just another case of the rich getting richer while the little guy gets left behind, hiking the same treacherous mountain trails of Luzon that our ancestors did.

XRP: Risky Business or Calculated Bet?

Let's address the elephant in the room: XRP. Amber’s plan to invest more than half of the reserve in XRP is alarming. Why? Because XRP has a history. A past of regulatory malfeasance and current, continued front-line fighting against the SEC.

  • Regulatory Uncertainty: The SEC lawsuit casts a long shadow, creating uncertainty about XRP's future.
  • Market Volatility: XRP's price has been notoriously volatile, reacting sharply to news and developments in the SEC case.
  • Reputational Risk: Associating the reserve heavily with XRP could raise concerns among some institutional investors.

Investing in XRP with the hopes of one day becoming an investment is a gamble, period. A smart bet though, it seems, judging from Amber’s internal modeling and market research. A gamble nonetheless. Or is this an acceptable risk we need to take to encourage institutional adoption, as Amber suggests. Or is it a somewhat fatal flaw that would sink the entire reserve?

I'm not saying XRP is doomed. It’s not that I think we shouldn’t test them—in fact, quite the opposite. It’s time to hold them accountable and ask some hard questions and expect some straight answers. How much of the reserve will go towards XRP. What capital and other risk management strategies are in place to mitigate those potential losses? Amber’s intention is to make sure that its investments in XRP are consistent with those goals. Specifically, it aims to promote a healthy and sustainable crypto ecosystem.

In the end, Amber’s transformative $100M crypto wager is a high-stakes gamble on both sides. It might be a stroke of genius, though, opening new markets to Asian blockchain startups and accelerating institutional adoption. It also has its fair share of risks, especially related to the concentration of power and reliance on XRP.

It is up to us, the crypto community, to hold Amber to account. Call for transparency and push for inclusivity. Foster the innovators and upstarts who are creating the future of finance, one line of code at a time. Let’s give Maria, and millions of other aspiring developers just like her, a fighting chance of bringing their dreams to life. So support your local blockchain startups, and let’s create our own future.